Pepper Advantage – the global loan servicing arm of Pepper Finance, which has a significant presence in Ireland – has been sold to American private equity firm JC Flowers & Co for an undisclosed sum.
The transaction, which is not expected to impact mortgage customers in the Republic whose loans Pepper services on behalf of other entities, is subject to regulatory approval.
The group, including its servicing arm, has changed hands several times in recent years, most recently being sold to private equity giant KKR for $532.7 million (€488.7 million) in 2017.
Pepper also operates a small, non-core commercial lending business in the Republic. Asked whether the lending component of Pepper’s Irish operations is included in the deal, a spokesman said there will be no change to the business in the Republic as a consequence of this deal.
“We are delighted to join forces with JC Flowers & Co as we embark on the next phase of our growth strategy,” said Fraser Gemmell, group chief executive of Pepper Advantage.
“Their extensive experience and resources will provide us with the support we need following a period of prolonged success under the ownership of Pepper Global and will help us enhance our offering. This deal comes at a critical junction in credit markets as we continue to support our clients in an evolving market environment.”
Andrew Smith, group chief operating officer of Pepper Advantage, said the sale represents an “excellent outcome” for shareholders. “The Pepper Advantage management team has built a world-leading credit management firm spanning Europe and Asia, which has created significant value for all stakeholders involved.”
The transaction is expected to close in the first three months of 2025, the firms said in a statement.
Accounts filed for Pepper Finance Corporation (Ireland) in November 2023 show that it made a pretax profit of €11.8 million in 2022, down from just under €14 million in 2021.
This was despite an increase in revenue to €59.1 million from €54.5 million a year earlier. The company’s administrative expenses increased in the period by almost €7 million to €48.6 million, with its payroll costs rising by €4 million to just under €35 million.
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