Another Large UK Debt Collection Deal: Lowell Group Acquires Interlaken Group

Lowell Group, a leading purchaser of non-performing consumer debt portfolios in the United Kingdom, today announced the acquisition of Interlaken Group, including its widely known Fredrickson International brand. The deal, for an undisclosed sum, will see ownership of the Surrey-based debt collection agencies group transfer to Lowell Group, along with the 300 plus employees. It is a union of two well-established innovators in the debt recovery industry in the United Kingdom.

The announcement comes a day after the deal between a private equity firm and Cabot Credit Management was made public.

Lowell and Interlaken have worked together successfully over many years. Recognising the importance of maintaining and developing the intellectual property of both businesses, Lowell Group intends to run its operations and the operations of the Interlaken Group separately, in order for each group to continue to develop its bespoke specialisms and skills. At the same time, the combined group will seek to develop and realise its range of value added services, enhancing its all-round client proposition. The combined group will also benefit from economies of scale and sharing of best practices.

The move follows Lowell Group’s initial entry into contingent collections in January 2011 when it set up an “outsource to sell” operation, Lowell Preston (Tocatto). It was set up as a research and development hub, offering clients the chance to work with the Lowell Group on a commission basis initially, before committing to a full debt sale and supporting decisions on pricing and strategies. However, it became much more of a strategic benefit for both the Lowell Group and its partner clients. Its success demonstrated the size and potential of the opportunity to operate distinct and separate debt collection and debt purchase businesses under one umbrella company, providing the rationale for today’s deal.

Commenting on the deal, James Cornell, Lowell Group CEO said, “We have always respected the Interlaken Group as market-leaders in their field and are very excited about the opportunities to be gained from bringing the two businesses together. Our move into contingent collections in 2011 helped us realise the potential of today’s deal; the opportunity to deliver best-in-class service to our clients whether it be through contingent collections or debt purchase. Through our partnership we will also be able to provide long-term value to our clients by delivering new, creative and innovative solutions beyond debt collection and debt purchase, and offer a ‘one-stop’ shop of services to drive operating profit and balance sheet objectives of our clients.

“With many clients seeking value beyond contingent collections or debt purchase activities, the combination of Lowell and Interlaken will enable us to deliver integrated solutions on a far larger and more advanced scale.”

Cornell also stressed that this will not become an exclusive relationship and both parties will continue to work with existing partners across the debt recovery industry.

Simon Jones, Group Managing Director of Interlaken Group, and Roy Jones, Group Chairman, founded Fredrickson International in 1992 and the Interlaken Group in 1996. Their decision to stand down from the Group preceded today’s deal. Simon will remain with the business in the short-term to ensure a smooth transition.

Simon Jones commented, “Today is the end of an era. Roy and I are exceptionally proud of the company we have built together. Since we established the Interlaken Group 17 years ago we have gone from employing just a handful of people to over 300 people today with annual collections now exceeding £100m.

“We are delighted to pass the reins across to the Lowell Group. We hand them a company with a strong leadership team, talented and dedicated staff, an enviable client base, the highest standards of compliance and ethics and an exceptionally strong performance. We could not think of a better company to take our business forward and take it to the next level.”

Frank Hanafin, Group Commercial Director, Interlaken Group, will remain with the Interlaken Group.

The company said that following the acquisition, the combined business will employ 950 people and have annual revenues of around $265  million.