A financial services company from Australia has received €436 million offer to takeover from KKR, a New York private equity firm.

 

It is not KKR’s first time entering the Irish market. Pairing up with the Ireland Strategic Investment Fund they set up a €500 million fund to finance the residential property development.

 

KKR bought Avoca Capital back in 2014, a credit investment manager in Europe located in Dublin, that was managing €7.05 billion of assets at the time.

 

Now they are looking at taking over the Pepper Group. Pepper entered the Irish financial services market about 5 years ago by buying GE’s Capital’s Irish mortgages.

Pepper has spread throughout Ireland ever since they bought around €600 million of subprime mortgages during the height of the financial crisis. Buying them at 40c on the euro which was backed by Goldman Sachs, a Wall Street investment bank.

 

They started servicing the loans that they were buying from private equity firms. They are current managing around €17 billion of loans. The loans are both commercial and residential.

 

Stock has risen as much as 9 percent on Tuesday as word was spreading about a takeover offer. KKC is now in the public eye as they await the decision from Pepper.

It will be interesting to see if this deal plays out. Pepper being such a huge influence on the Irish mortgage market we will see how it affects us.

In reference to Financial services group Pepper receives takeover bid by Joe Brennan in the Irish Times.