London, 8 December 2008 – Investcorp Technology Partners, the technology private equity arm of alternative investment manager Investcorp, has agreed to purchase a 40% equity stake in TDX Group, the UK’s leading provider of analytics-based consumer debt management services, for approximately £28 million.
Investcorp will work alongside TDX Group’s founders, Blenheim Chalcot, and existing management team to drive future growth in its existing UK and international businesses. Established in 2004 and headquartered in Nottingham in the UK, TDX Group assists its clients in maximising the value of arrears debt portfolios through analytics and data driven asset sales, recoveries management and financial difficulties service platforms. In the UK, TDX Group sells over 40% of all defaulted unsecured consumer debt and by the end of the year, the company’s recoveries management platform will manage approximately five million accounts.
In addition, TDX Group runs The Insolvency Exchange, which advises on more than 80% of the UK’s Individual Voluntary Arrangements (IVAs)1 on behalf of creditors, the process by which debtors negotiate a repayment plan with their creditors in order to avoid bankruptcy. Earlier this year TDX Group launched a similar scheme, The Debt Management Exchange to address the growing market for debt management plans2.
Mark Onyett, TDX Group’s Chief Executive, said: “Our partnership with Investcorp marks a new phase in our development. As well as bringing market insight and additional financial strength, Investcorp shares our ambitious vision of how to expand the company both in its core UK market as well as internationally. To attract a partner of Investcorp’s calibre underscores the strength of our business model and management team.”
Hazem Ben-Gacem, Managing Director at Investcorp, said: “We are very pleased to work with Mark and his management team, who have, in a short period of time, established TDX Group as the market leading provider of arrears management solutions in the UK. TDX Group has a comprehensive service offering with a proven and measurable track record in reducing its customers’ debt write-offs, and we think there is substantial growth potential for the business in the years to come.”
In the UK, the total debt (secured and unsecured) of the UK population is approximately £1.4 trillion. Furthermore, the global economic slowdown is resulting in an upswing in delinquent debt across many countries. Given this, the need for quality arrears management has significantly increased, as an improved collection or sales strategy for delinquent debt can result in considerably lower write-offs for creditors.
Media Contacts
Fishburn Hedges
Jane Padgham/Andrew Marshall
+44 (0) 20 7839 4321
Investcorp
Deborah Botwood Smith
+44 (0) 20 7629 6600
Citigate Dewe Rogerson
Patrick Evans/ Phil Anderson
+44 (0) 20 7638 9571
TDX Group
Kirsty Macpherson
+44 (0) 115 953 1253
Advisors to the transaction
Investcorp
Financial advisor: PricewaterhouseCoopers
Legal advisor: S J Berwin
TDX Group
Financial advisor: William Blair & Company
Legal advisor: CMS Cameron McKenna
About Investcorp Technology Partners
Investcorp Technology Partners is a leading private equity investor in small and mediumsized technology businesses in North America and Europe. The team focuses on growth capital, buyout, corporate carve-out and take-private transactions. Some of the group’s recent investments in the UK include Moneybookers Ltd., Europe’s leading independent emoney issuer, Sophos Ltd., one of the world’s largest security software providers and kgb Inc., the parent company for The Number Ltd, the UK’s leading directory assistance provider under the 118 118 number.
Investcorp Technology Partners is part of Investcorp, a leading provider and manager of alternative investment products. It has offices in London and New York and is publicly traded on the Bahrain Stock Exchange (INVCORP) and the London Stock Exchange (IVC). Investcorp has five lines of business: private equity, hedge funds, real estate, technology investment and Gulf growth capital. Founded in 1982, Investcorp has grown to become one of the largest and most diverse alternative investment managers in terms of both product offerings and geography. As of September 30, 2008, Investcorp had approximately $17 billion in invested assets under management.
About TDX Group
TDX Group is a leading provider of credit risk management solutions, whose information-based approach is revolutionising the industry. In the UK, TDX Group sells over 40% of all defaulted debt and manages debt portfolios for leading financial services companies, utility providers and debt portfolio owners. Additionally, it runs IVA and Debt Management Plan (DMP) hubs for creditors and IPs: The Insolvency Exchange (TIX) and The Debt Management Exchange (DMX). Through its combined UK and Spanish offices, TDX Group offers services across Europe, North and South America and Asia.
Its unique intermediary position provides TDX Group with access to unrivalled information on debt sale, debt purchase, IVAs and recoveries strategy and performance. Through sophisticated analysis of this information TDX Group is enabling creditors and debt portfolio owners to improve returns on their semi and non-performing assets. TDX Group has worked on behalf of all of the major banks in the UK, several major utility companies and a number of other financial services companies.
1 Individual Voluntary Arrangement (IVA)
Normally an alternative to bankruptcy proceedings, an IVA enables someone to make a voluntary arrangement with their creditors through the law courts for the settlements of debts. Typically IVA's last for a 5 year period at the end of which and unsettled debt is wiped clear by the individual’s creditors.
2 Debt Management Plan (DMP)
A Debt Management Plan (DMP) is an informal arrangement between an individual and their creditors. DMPs are not binding agreements and involve full repayment of any outstanding debt over an extended period of time.