Link Group, the listed Australian company that is buying Pepper Ireland, said the cycle of post-Covid non-performing loans (NPLs) across Europe meant a “very bright” future for its expanded business.
epper European Services (PES) and Link’s BCM, who will join forces after the transaction, will deal with bad debts or bad debts.
Earlier this year, Link agreed to acquire PES for € 200 million. It includes Pepper Ireland, which has over 500 employees in Shannon and Dublin. At the end of last year, the Irish company had € 18 billion in assets, including 60,000 residential mortgages, of which 80% were performing loans, and 10,000 commercial loan accounts.
The deal for PES is under investigation by the Competition and Consumer Protection Commission. The watchdog said the investigation was needed to determine whether the merger of Pepper Ireland with Link’s BCM business could result in a substantial lessening of competition in the state.
In a business update with analysts, Andrew MacLachlan, Link’s CFO, commented on the potential merger and the post-Covid NPL cycle.
“We remain very positive about the acquisition of PES with very bright growth prospects for the combined BCM-PES business in the medium term due to the next round of NPL in post-Covid Europe”, he said .
MacLachlan also said Link continues to engage with the competition watchdog and expects the PES acquisition to be completed in the second half of fiscal 2021.
Pepper Ireland manages loans resold by Bank of Scotland (Ireland), after its withdrawal from this market, Permanent TSB and Danske Bank, as well as loans resold by vulture funds like CarVal. It recorded a 25% increase in turnover to 52 million euros the year before its sale.
In October 2019, Ulster Bank transferred the management of more than 3,000 non-performing mortgages to Pepper.
In September, Pepper announced that it would cease commercial lending activities in Ireland, citing “increasingly difficult market conditions”. It is a question of continuing the management and administration of the existing installations.
PES employs over 880 people across Europe and also operates subsidiaries in the UK, Spain, Greece and Cyprus. It has around 40 billion euros in assets under management.
Together, Link and PES will have approximately € 130 billion in assets under management. Link, who employs around 530 people here, declined to add any further comment.