Offer by Varde Partners

RNS Number : 0282P

Electra Private Equity PLC

27 September 2011

 



Electra sells SAV Credit

Electra Private Equity PLC ("Electra") today announces that it has entered into a binding agreement to sell its interest in specialist credit card provider, SAV Credit ("SAV"), to Värde Partners ("Värde") in a transaction with a total value of £472 million. This deal is subject to competition clearance.

On completion this will result in Electra receiving gross proceeds in excess of £40 million. Electra's portfolio, including SAV, will be revalued on 30 September 2011, however, based on the 31 March 2011 valuation of SAV, this would imply an uplift in diluted NAV per share of 56.2p, and a return of 1.7x on cost.

SAV is the UK's leading specialist credit card provider, managing approximately 500,000 credit card accounts with more than £600 million in credit card assets.  Electra first invested in SAV in October 2006 alongside existing investor Palamon Capital Partners.  Since then SAV has completed a number of follow-on investments with the result that it has more than doubled the size of its receivables portfolio. The company acquired the Marbles credit card portfolio from HSBC in October 2007 and, with the financial backing of Värde, purchased Citigroup's credit card portfolio in March 2010.

David Symondson, Deputy Managing Partner of Electra Partners, the manager of Electra Private Equity PLC, said: "This is a perfect example of crisis breeding opportunity: for SAV it was finding investors willing to support and fund the growth of a non-standard credit card business during one of the most challenging operating environments we have seen; and for Electra Partners, management and fellow investors it was the decision, in anticipation of the credit crisis, to switch the strategy successfully from organic growth to portfolio acquisition."

James Corcoran, CEO of SAV Credit Limited, said: "Electra have been very supportive investors, helping SAV to build the UK's leading specialist credit card business. We look forward to the future with great confidence and working with Värde to realise the considerable growth opportunities that lie ahead of us."

Electra Partners refers to Electra Partners LLP acting on behalf of its client Electra Private Equity PLC.

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For further information please contact:

For David Symondson:

Kate Ruck Keene, M:Communications                                                         [phone]

Monique Dumas, Investor Relations Partner, Electra Partners                        [phone]

Note to Editors:

About Electra Private Equity PLC

Electra Private Equity PLC is an investment trust listed on the London Stock Exchange since 1976. Electra's objective is to achieve a rate of return on equity of between 10-15% per annum over the long term by investing in a portfolio of private equity assets. Over the ten years to 31 March 2011 Electra achieved a diluted net asset value increase of 128%, compared to an increase of 13% for the FTSE All-Share Index.

For further information please visit www.electraequity.com.

About Electra Partners LLP

Electra Partners is an independent private equity fund manager with over 25 years experience in the mid-market buyout sector. As at 31 March 2011, the firm had funds under management of £1.2 billion. The firm's flexible investment approach allows it to invest across a broad range of sectors and financial instruments including equity, senior equity, convertibles and mezzanine debt. Concentrating principally on Western Europe, and with the majority of investments expected to be made in the United Kingdom, Electra Partners typically seeks to invest in the region of £40 to £100 million of equity, in deals of up to £300 million enterprise value.

Electra Partners manages the funds of its major client Electra Private Equity PLC and Electra Partners Club 2007 LP, a fund raised in 2008 for the sole purpose of investing alongside Electra in controlled investment situations.

For further information please visit www.electrapartners.com. Electra Partners LLP is authorised and regulated by the Financial Services Authority.

About SAV Credit Limited

SAV Credit Limited, established by Richard Langstaff in 2001, pioneered specialist credit card lending in the UK, catering for consumers often overlooked by mainstream financial service providers. Based in Kent, the group employs around 60 staff supported by another 400 people at servicing partners including Lloyds Banking Group, First Data and Agylisis. SAV acquired the marbles credit card business from HSBC Bank plc in October 2007 and, together with the aqua credit card and the Opus card, now has 500,000 customers under management with balances in excess of £600 million.

To find out more about SAV Credit visit www.savcredit.co.uk

 

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