Carlyle offers $197m for Australian debt collector

The private equity firm is offering to buy all outstanding shares for A$1.82 apiece through a scheme of arrangement, according to a filing. This values the equity at A$120 million. Pioneer also holds net debt of A$168 million. The company’s shares are currently valued at A$2.46, which implies a market capitalization of A$156 million, but they have been suspended from trading since late August.

The suspension came amid concerns about the financial sustainability of the business. Pioneer reached a standstill agreement with senior financiers in September while it assessed proposals received regarding the realization of the value of its assets, including change of the control and the provision of alternative funding. This agreement was extended several times and expired on December 2. During this period, the business continued to function as normal.

The Carlyle scheme – which has been endorsed by the board but still requires shareholder and court approval – envisages a lower price if Pioneer proceeds with a special dividend payment of up to A$0.24 per share. Shareholders also have the option to roll over their interests into the new holding company structure. Their combined stake would be capped at 12.4%.

Founded in 2009, Pioneer provides solutions for customers who are looking for a way out of financial difficulty. It claims more than 160,000 customers across Australia and New Zealand. The company typically buys loans made to delinquent borrowers from banks and other financial institutions. It then devises repayment schedules with these borrowers.

As of June, Pioneer held purchased debt portfolios with a net carrying value of A$249.8 million. The current balance of these portfolios – the amount due from customers that was expected to be realized in cash over the next 12 months – was A$92.7 million. The company also had drawn borrowings of A$129.7 million and A$40 million in medium term notes, due in 2022.

Pioneer generated A$74.7 million in revenue for the 12 months ended June 2019, down 7.36% year-on-year. Over the same period, net profit fell 75.7% to A$4.28 million, while EBITDA rose 16.7% to A$63.4 million.

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• Topics
• Australasia
• Financials
• Buyouts
• Australia
• New Zealand
• The Carlyle Group
• Financial Services