Link Group, an Australian-listed firm, has pulled out of a €200m deal to buy Pepper European Services (PES), which included Pepper Ireland.
In a statement on Monday to the Australia Securities Exchange, Link said completion of the deal was subject to regulatory approvals and commercial conditions, and the final date for these to be met under the Share Purchase Agreement (SPA) was 30 January 2021.
“As the long stop date has passed without a transaction being completed, Link Group has exercised its right to terminate the SPA and not to proceed with the acquisition,” the company said.
Last year Link agreed to acquire Pepper European Services in a deal worth €200m. This included the acquisition of Pepper Ireland, which has around 500 employees across Shannon and Dublin.
Link Group CEO and MD, Vivek Bhatia, said: “The Link Group business is resilient with strong foundations. We have a clear strategic focus to simplify the business, deliver the global transformation program and maintain a strong balance sheet. As a result of the termination of the PES transaction, we will preserve the capital for future growth opportunities.”
In a statement on Monday Pepper said it will now defer plans to sell PES. Its focus will be on driving growth across its European markets.
Mike Culhane, CEO of Pepper Group, said: “PES had its strongest year ever in 2020, showing growth in Assets Under Management (AUM), which now stand at over €40bn, and impressive EBITDA growth across all our jurisdictions.”
“Having strengthened our service capabilities significantly in recent years we are ideally positioned to capitalise on material growth opportunities in all our key European markets, accentuated by the growing need for highly specialised loan servicers to minimise the negative impact Covid-19 related challenges will have on consumers and financial institutions across Europe,” Mr Culhane added.
At the end of 2019 the Irish firm had €18bn of assets, including 60,000 residential mortgages, some 80pc of which were performing loans, and 10,000 commercial loan accounts.
Pepper Ireland manages loans sold on by the likes of Bank of Scotland (Ireland), after it pulled out of this market, Permanent TSB and Danske Bank.
In the second half of last year PES took on 12 new portfolio mandates, with eight new clients adding over €5bn to its assets under management.