The best performer on the S&P/ASX 200 index on Friday was the Credit Corp Group Limited (ASX: CCP) share price.
After returning from its trading halt the debt collector and receivables company's shares rocketed 13% higher to $27.27.
Why did the Credit Corp share price rocket higher?
This afternoon Credit Corp announced that it has acquired Baycorp Holdings and its associated entities from Nasdaq-listed Encore Capital Group for a total net consideration of approximately A$65 million.
Baycorp is a large and well-established debt purchasing and debt collection operator across Australia and New Zealand. Its assets comprise a sizeable purchased debt ledger (PDL) book, a PDL collection platform, and agency collection businesses in Australia and New Zealand.
Management advised that some integration of the acquired businesses will be required in to order to deliver pro-forma returns.
The PDL collection platform will be quickly merged with Credit Corp's existing Australian and New Zealand debt buying business. Whereas the New Zealand agency business will be preserved and enhanced, and the Australian agency operation will be progressively restructured to ensure that it operates sustainably.
Credit Corp's CEO, Thomas Beregi, believes the acquisition offers an attractive secondary PDL book acquisition and the opportunity to create a large and successful agency business.
He said: "We expect to achieve our targeted investment return on the PDL component of the transaction and see opportunity to scale up our existing agency activities."
In addition to this, the company updated the market on its guidance for FY 2020.
According to the release, this acquisition has given its full year outlook a major boost as it "will produce earnings growth in the core Australian and New Zealand debt buying business to complement strong growth from the company's US debt buying and consumer lending segments."
In light of this, it has revised its net profit after tax growth guidance for FY 2020 to be in the range of 15% to 18%. This compares to its prior guidance of 7% to 10% annual growth.
Also rising strongly on Friday were the Star Entertainment Group Ltd (ASX: SGR) share price and the Super Retail Group Ltd (ASX: SUL) share price on the back of solid full year results releases.
