UK Debt Purchaser IPO Put on Hold, But Optimism Reigns

United Kingdom-based debt collector Equidebt launched a failed bid to go public this summer. But the failure to follow-through with the listing has less to do with the company’s performance than with current market conditions.

Rumors swirled earlier in the year that Equidebt, based in Wellsbourne in England’s West Midlands area, would seek listing on a public exchange in the U.K. Equidebt made it official in June with an announcement that it would list on the Alternative Investment Market (AIM), a sub-market of the London Stock Exchange geared toward smaller companies (“Debt Purchaser-Collector to be First Public ARM Firm in UK,” 6/11).

But the deal never went through. Equidebt withdrew its bid the next month and quietly went back to business. According to an article in U.K. magazine Credit Today, Equidebt cited market volatility as the primary reason for cancelling the listing. Specifically, a record number of British consumers were declaring bankruptcy and the impact of those actions were uncertain at the time. Also, the implosion of the U.S. subprime credit market added more uncertainty to the bid.

Even though Equidebt pulled out of the listing, the company’s management is bullish on the prospects of U.K. ARM companies, including itself, trading in public markets.

Wes Mulligan, CEO of Equidebt, told Credit Today that he sees a “land grab” coming among debt buyers and collection agencies in the U.K. due in no small part to the explosive growth experienced by companies in the sector. “We have a marketplace that’s booming and a number of really well-run businesses operating in this sector,” he said.

There is likely opportunity for larger U.K. ARM companies to go public soon. Equidebt is a mid-sized player, valued at around $145.5 million when it launched its listing bid. James Cornell, CEO of major U.K. ARM player Lowell Group, told Credit Today that the debt purchasing business in the U.K. is exploding, following the lead of the market in the U.S. He said that there had “never been a better time to invest in the [debt purchasing] market.”