Encore Capital Group Inc · NASDAQ:ECPG
Encore Capital — Merger or Acquisition (May 2013)
11 slides from Encore Capital's merger presentation, May 30, 2013
Slide 1: Encore Capital Group, Inc. – Cabot Credit Management Discussion Material
Exhibit 99.1 ENCORE CAPITAL GROUP, INC. CABOT CREDIT MANAGEMENT DISCUSSION MATERIAL May 30, 2013
Slide 2: Cautionary Note About Forward-Looking Statements
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS The statements in this presentation that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “will,” “may,” “believe,” “projects,” “expects,” “anticipates” or the negation thereof, or similar
Slide 3: Encore Has Been Exploring the U.K. Non-Performing Loan Market for Several Years
ENCORE HAS BEEN EXPLORING THE U.K. NON-PERFORMING LOAN MARKET FOR SEVERAL YEARS Favorable Opportunity to U.K. is a large operational leverage Encore's market conditions capabilities • Second largest debt • Transparent regulatory • Deploy Encore's purchase market environment superior analytical • ~£9
Slide 4: We Waited Until We Found an Opportunity That Fit Our Criteria
WE WAITED UNTIL WE FOUND AN OPPORTUNITY THAT FIT OUR CRITERIA • Cabot is the leading player in the U.K. debt purchase market Market leader • Cabot purchased ~£130M of charged off debt in 2012 Growth • Cabot specializes in the growing semi-performing debt potential segment, which has very favorable r
Slide 5: The U.K. Debt Purchase Market Has Grown Substantially
THE U.K. DEBT PURCHASE MARKET HAS GROWN SUBSTANTIALLY Face-value of debt sold in the U.K. (2009-12) £B 10 9.4 8 +34% 7.0 6 5.0 3.9 4 2 0 2009 2010 2011 2012 PROPRIETARY 5
Slide 6: Cabot Is the Leading Purchaser of Debt in the U.K.
CABOT IS THE LEADING PURCHASER OF DEBT IN THE U.K. Cabot was the leading purchaser of debt in the U.K. in 2012 Market leader in U.K. debt management For FY 2012 • Over 14 years of collections growth • Operations in Great Britain and Ireland 1 Cabot 130 Specializes in higher balance, “semi- performin
Slide 7: Cabot Has Delivered Strong Collections and Adjusted EBITDA Growth
CABOT HAS DELIVERED STRONG COLLECTIONS AND ADJUSTED EBITDA GROWTH 1 Total Collections and Adjusted EBITDA (2010-12) £M 200 17% 27% 161 150 142 119 111 100 90 69 50 0 2010 2011 2012 1 Total Collections Adjusted EBITDA 1.Adjusted EBITDA is defined as net cash flow from operating activities adjusted to
Slide 8: Cabot Will Be Owned Jointly by Encore, J.C. Flowers and Cabot Management
CABOT WILL BE OWNED JOINTLY BY ENCORE, J.C. FLOWERS AND CABOT MANAGEMENT Deal structure Details • Encore will have the largest ownership interest in Cabot Management • Encore will control the board • Cabot will be consolidated in Encore's financial statements • This transaction is expected to genera
Slide 9: The Investment Structure Provides Optimal Return and Enables Consolidation
THE INVESTMENT STRUCTURE PROVIDES OPTIMAL RETURN AND ENABLES CONSOLIDATION Security type purchased What it gives Encore Allows potential Bridge Preferred repatriation of £22.5M in Equity Certificates the first year to the extent (PECs) permitted by existing bond (£22.5M) covenants Encore's 12% cumul
Slide 10: Encore Provides Cabot with Several Synergy Opportunities
ENCORE PROVIDES CABOT WITH SEVERAL SYNERGY OPPORTUNITIES • Deploy Encore's superior analytical Leverage capabilities to the Cabot platform Encore's • Focus on improving account analytics segmentation and specialized collection strategies Leverage • Enhance collections by leveraging Encore's Encore's
Slide 11: Encore's Acquisition of Cabot Will Provide a Vehicle to Continue Its Strong Earnings Growth
ENCORE'S ACQUISITION OF CABOT WILL PROVIDE A VEHICLE TO CONTINUE ITS STRONG EARNINGS GROWTH Growing market • Encore can deploy capital in a growing market Profitable market • Portfolio IRRs are strong and favorable Timeline • Deal expected to close in Q3 of 2013 1 Encore EPS • Supports Encore's 15%
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