Bloomberg News reported earlier this week that JLL Partners, owners of J.G. Wentworth (JGW), have abandoned plans to sell the company after bids failed to meet expectations and may now consider a dividend recapitalization or an initial public offering instead.
Earlier reports had indicated that JLL Partners was seeking a $1 billion purchase price for JGW from private-equity firms with Moelis & Co. and Deutsche Bank AG acting as investment bankers.
JGW, which was founded in 1995, has experienced a tumultuous recent history:
- On June 1, 2009, JGW and two affiliated companies entered Chapter 11 bankruptcy protection after the company "encountered liquidity problems amid a tightening credit market".
- Standard & Poor's Rating Services had earlier announced, at JGW's request, that it would no longer rate JGW's counterparty credit and senior secured debt.
- During this period, JGW laid off 120 of its 200 employees and closed its office in Las Vegas.
- According to industry sources at that time, JGW's $325 million of general corporate bonds were "almost worthless" and were trading, if at all, for pennies on the dollar.
- Less than six months later, JGW emerged from bankruptcy with an announcement that owner JLL Partners had invested an additional $100 million in the company.
- By 2011, JGW had re-entered the asset-backed structured settlement securitization market.
- A June 2011 DBRS report, published prior to JGW's 23rd asset-backed structured settlement securitization, stated that JGW had previously consummated 59.000 structured settlement factoring transactions with aggregate payment streams of $4.5 billion and 0.11% of losses.
- Also in 2011, JGW merged with Peachtree Settlement Funding (Peachtree) in a stock swap, with JLL Partners retaining control of the merged companies which have each continued to participate in the secondary market.
- Industry estimates obtained by S2KM of the post-merger 2012 market share (revenue and sales) of the now-combined JGW/Peachtree vary from a low of 50% to a high of 75%.
- Some industry experts believe JGW/Peachtree's share of the estimated 2012 industry profits of $120 million was $100 million, or 83%.
For S2KM's summary evaluation of the structured settlement secondary market in 2012, see this prior blog post.
For S2KM's complete reporting about the structured settlement secondary market, see the structured settlement wiki.
For more comprehensive legal analysis about transfers of structured settlement payment rights, see Chapter 16 of "Structured Settlements and Periodic Payment Judgments" (S2P2J).