International ARM M&A Deal Activity Heats Up

Michael Lamm

If you ever doubted the ARM industry’s footprint is global in scale, these past two and half months should change your perspective very quickly.  In the past two weeks, there have been multiple, large-scale international ARM deals that have been announced that will force Q2 2011 deal value into levels we haven’t seen since 2007.

It has been a fairly light quarter to date when you look at just the U.S. and Canada deal volume but when you incorporate recent deals that happened in France, Brazil and the UK we estimate deal value for Q2 2011 at nearly $800 million.  We will release our official Q2 2011 M&A results in July before the ACA Conference in Dallas; keep an eye out on insideARM.com for them.

Recent International Deal Activity

I have provided below the press releases to each of the transactions. EOS, one of the largest ARM service providers in the world continued, on the acquisition tear acquiring an ARM company in France and Brazil. And two well-known private equity funds in the UK were busy striking deals with two of the leading UK based debt buying companies.

EOS’ acquisition into Brazil of Hoepers Recuperadora de Crédito S.A

Lowell Group, a UK debt buyer acquired by TDR Capital

EOS acquisition into France of Credirec

Anacap’s acquisition of Cabot Financial

What is Driving International Deal Activity?

We haven’t seen this level of deal activity internationally since Q1 2007 where we had multiple large scale cross-border deals. But different forces were driving activity then.

Main drivers for the more recent deal activity include:

1. Growth of consumer credit in these countries
2. Lending markets have begun to show life again at a time of still-historically low interest rates, driving M&A activity globally
3. The need for large ARM service providers to achieve their growth expectations by expanding their global footprint

I think we are going to see more deal activity on the international front this year as M&A continues to heat up, especially in the emerging markets.

I always welcome your thoughts on my blog, feel free to call or email me.

Michael D. Lamm advises owners on their growth and exit strategies for Kaulkin Ginsberg’s Strategic Advisory team. Michael can be reached directly from Kaulkin Ginsberg’s Philadelphia office at 240-499-3808 or by email. You can also read his blogs on insideARM.com.