How Will Credit Clear’s $10.9M ARC Deal Transform UK Debt Collection?
Credit Clear Limited has agreed to acquire UK debt collector ARC Europe for A$10.9 million, backed by a $20.75 million institutional placement led by Chair Paul Dwyer. The deal aims to accelerate growth by integrating Credit Clear’s digital platform into ARC’s established UK operations.
- Binding agreement to acquire ARC Europe for A$10.9 million
- Acquisition expected to be earnings accretive in first year
- Institutional placement raises $20.75 million to fund growth
- Chair Paul Dwyer subscribes $8 million, increasing stake to 8.2%
- Deal subject to UK Financial Conduct Authority approval
Strategic UK Expansion
Australian fintech and debt collection specialist Credit Clear Limited (ASX – CCR) has taken a significant step in its international growth strategy by entering into a binding agreement to acquire ARC Europe Ltd, a UK-based debt collection agency. The acquisition, valued at approximately A$10.9 million, combines cash and equity components and is designed to broaden Credit Clear’s geographic footprint and total addressable market.
ARC Europe, established in 2001, serves a diverse client base across financial services, health, insurance, and utilities sectors in the UK, with access to European markets. With FY25 revenues of $8.8 million and EBITDA of $1.24 million, ARC is expected to contribute positively to Credit Clear’s earnings from the outset.
Funding the Deal and Growth Ambitions
To support the acquisition and future growth initiatives, Credit Clear has successfully completed a $20.75 million institutional placement at $0.25 per share, representing a modest discount to recent trading prices. Notably, Chair Paul Dwyer has committed to subscribing for $8 million worth of shares, pending shareholder approval, which will elevate his stake to approximately 8.2%, underscoring strong insider confidence in the company’s expansion plans.
The upfront cash portion of the acquisition, totaling around $8.6 million, will be funded from the placement proceeds. Additional consideration includes shares subject to escrow and an earn-out mechanism tied to ARC’s EBITDA growth over the next two years, aligning incentives for performance post-acquisition.
Leveraging Digital Innovation
Credit Clear plans to overlay its award-winning digital collections platform onto ARC’s traditional debt collection operations, aiming to replicate the success of its 2022 ARMA acquisition in Australia. This integration is expected to drive operational efficiencies, enhance client growth, and unlock cross-selling opportunities, particularly among large telecommunications and utilities clients with UK and European operations.
ARC’s co-founders will remain involved to ensure a smooth transition and integration, reflecting Credit Clear’s collaborative approach to acquisitions.
Regulatory and Market Outlook
The acquisition remains subject to approval by the UK Financial Conduct Authority, anticipated within 60 days. Completion is expected shortly thereafter, with a general meeting scheduled for early December to approve the second tranche of the placement involving Chair Dwyer’s subscription.
Credit Clear’s CEO Andrew Smith highlighted the strategic rationale, emphasizing the scalability of their digital-first model and the potential for superior outcomes in the UK and European markets. The company continues to evaluate further acquisition opportunities, maintaining a disciplined approach to capital deployment.
Bottom Line?
Credit Clear’s ARC acquisition and capital raise mark a pivotal moment in its UK expansion, with integration execution and regulatory approvals now in focus.
Questions in the middle?
- How will Credit Clear’s digital platform impact ARC’s traditional debt collection efficiency?
- What are the risks if UK FCA approval is delayed or withheld?
- Which other acquisition targets is Credit Clear considering to complement this deal?
