Cinven, a British private equity firm, and Luxembourg-based CVC Capital Partners have agreed to purchase NewDay, a consumer finance provider specialising in the UK credit card market, from Varde Partners.
The agreement has been announced after NewDay gave up its plans to launch an initial public offering (IPO) following the EU referendum outcome.
Subject to customary regulatory and anti-trust approvals, the transaction is expected to value NewDay around £1bn, although sales value has not been disclosed.
NewDay offers credit to over five million customers and has £1.6bn of receivables. It manages two business units: Near-Prime, which provides aqua and marbles branded credit cards to customers; and Co-brand, which offers credit cards in partnership with established retailers such as Debenhams and House of Fraser.
Upon completion of the takoever, the management team will continue to be headed by James Corcoran, CEO of NewDay, who joined in 2009.
Cinven partner Caspar Berendsen said: “NewDay is an extremely well-managed, strongly-performing company.
“Within the UK's large credit card market, the Company is well positioned in the attractive and growing near prime segment. It has a strong track record of organic and acquisitive growth and we look forward to supporting this growth."
CVC partner Peter Rutland said: “There is a significant opportunity for specialised lenders like NewDay to help customers build their credit histories.
“We look forward to working with management to help support their continued growth by delivering products that are aligned to customers' needs."