Introduction to Newday Group
The owner of Argos’ Store Card Division, Newday Group, is on the verge of signing a contract with one of the world’s largest private equity investors, estimated to be around 1.7 billion GBP. This development comes as the company has been exploring options for a full sale or a structured transaction for months.
Potential Investment by KKR
According to City sources, KKR is likely to buy the existing Newday credit book and acquire a stake in its credit platform, in addition to the existing shareholders Cinven and CVC Capital Partners. An agreement could be announced as early as Wednesday, marking a significant investment in the company.
Newday’s Operations and Partnerships
Newday has established consumer credit connections with leading UK retailers, including John Lewis Partnership and AO, an online electric goods website. The company operates several credit brands, including aqua, fluid, and murmurs, as well as the first digital-only credit card, GDP. With around four million customers, Newday is one of the largest private providers of UK consumer credit services.
Financial Performance and Growth
Last year, Newday reported an underlying profit before taxes of 213 million GBP, with new customer acquisitions increasing by 36%. The company has also formed partnerships with major financial institutions, including a technology and loan partnership with Lloyds Banking Group and a pilot technology partnership with the Debenhams Group.
Leadership and Management
Newday is led by Sir Mike Rake, the former BT Group and WorldPay Chairman, and managed by John Hourican, the former Bank of Cyprus and Royal Bank of Scotland Executive. The company’s leadership team has been instrumental in driving its growth and expansion in the UK consumer credit market.
Recent Developments and Acquisitions
In a significant move, Newday acquired Argos’ Store Card Business from J Sainsbury, the supermarket giant, for 720 million GBP last year. This acquisition has further solidified Newday’s position as a major player in the UK consumer credit market. Despite the recent developments, Newday, KKR, and CVC have declined to comment on the potential investment.
