Cinven and CVC Capital Partners have agreed to buy UK-based consumer finance provider NewDay. The seller is Värde Partners. No financial terms were disclosed. Goldman Sachs provided M&A advice to Cinven and CVC on the transaction.
Cinven and CVC Capital Partners today announce that funds advised by Cinven and CVC Capital Partners have agreed to acquire NewDay (‘the Company’), a leading consumer finance provider specialising in the UK credit card market, from Värde Partners. The consideration is not disclosed.
NewDay is one of the UK’s fastest growing specialty finance companies, providing credit to more than five million customers and with £1.6 billion of receivables. It operates in two business segments: Near-Prime, which provides aqua and marbles branded credit cards to customers who are new to credit or wish to rebuild their credit history; and Co-brand, which provides credit cards in partnership with established retailers such as Debenhams and House of Fraser.
The UK is the largest credit card market in Europe. NewDay has generated strong growth over the past five years, which is expected to continue given continued consumer demand for its products, strong brand recognition and distribution channels, as well as the launch of additional innovative credit products.
NewDay has strong underwriting capabilities, with its credit risk management systems using proprietary analytics and insights refined over the past 14 years. The business delivers industry leading customer advocacy, and is well-positioned for significant future growth.
The management team will continue to be led by James Corcoran, Chief Executive, who joined NewDay in 2009. The Company is headquartered in London with additional operations in Leeds and employs over 800 people.
Caspar Berendsen, Partner at Cinven commented:
“NewDay is an extremely well-managed, strongly-performing company. Within the UK’s large credit card market, the Company is well positioned in the attractive and growing near prime segment. It has a strong track record of organic and acquisitive growth and we look forward to supporting this growth.”
Peter Rutland, Partner at CVC, added:
“There is a significant opportunity for specialised lenders like NewDay to help customers build their credit histories. We look forward to working with management to help support their continued growth by delivering products that are aligned to customers’ needs.”
James Corcoran, Chief Executive of NewDay, commented:
“We are delighted to be working with Cinven and CVC going forward – both have an excellent track record of supporting growing businesses and as responsible investors in the financial services sector. They are both fully aligned with NewDay’s objectives of continuing to grow by offering compelling products and services to our customers alongside the highest standards of risk management.”
Cinven and CVC Capital Partners are leading global private equity firms with over €14 billion and $33 billion of assets under management respectively and a strong track record of investing in and successfully growing financial services businesses. Cinven’s financial services investments have included: Avolon, Premium Credit, JRP Group (formerly Partnership Assurance), Viridium (formerly Heidelberger Leben), Ergo Italia, and Guardian Financial Services. CVC’s UK financial services investments have included: Avolon, Brit Insurance, Domestic & General, the RAC, AA, Saga and Skrill.
The transaction is subject to customary regulatory and anti-trust approvals.
Advisors to Cinven and CVC on the transaction included: Goldman Sachs (M&A), Clifford Chance (legal), PwC (commercial), EY (accounting), Deloitte (tax), Alvarez & Marsal (credit) and Duff & Phelps (regulatory).
· Cinven is a leading international private equity firm focused on building world-class European and global companies.
· Its funds invest in six key sectors: Business Services, Financial Services, Healthcare, Industrials, Consumer, and Technology, Media and Telecommunications (TMT).
· Cinven funds acquire companies that are based predominantly in Europe, or have / will have significant European operations, which require an equity investment of €100 million or more.
· Cinven has offices in Guernsey, London, Paris, Frankfurt, Milan, Madrid, Luxembourg, Hong Kong and New York.
· Since 1988, Cinven funds have invested in 117 companies worth around €90 billion and realised proceeds of €30 billion. Today Cinven has €11 billion in assets under management.
· Cinven raised €7 billion (approximately US €8 billion) for the Sixth Cinven Fund in 2016.
· Cinven takes a responsible approach towards its portfolio companies, their employees, suppliers, local communities, the environment and society.
· Cinven Limited, Cinven Capital Management (V) General Partner Limited and Cinven Capital Management (VI) General Partner Limited are each authorised and regulated by the Guernsey Financial Services Commission and Cinven Partners LLP, the advisor to the Cinven Funds, is authorised and regulated by the Financial Conduct Authority.
· In this press release ‘Cinven’ means, depending on the context, any of or collectively, Cinven Group Limited, Cinven Partners LLP, Cinven (LuxCo1) S.A., and their respective Associates (as defined in the Companies Act 2006) and/or funds managed or advised by the group.
· For more information, please visit www.cinven.com
About CVC Capital Partners
CVC Capital Partners is one of the world’s leading private equity and investment advisory firms. Founded in 1981, CVC today has a network of 24 offices and over 400 employees throughout Europe, Asia and the US. To date, CVC has secured commitments of over US$85 billion in funds from a diverse and loyal investor base, completing over 300 investments in a wide range of industries and countries across the globe, with an aggregate enterprise purchase value of over US$250 billion.
For further information about CVC, please visit: www.cvc.com