The owners of J.G. Wentworth and Peachtree Settlement Funding, the two largest purchasers of structured settlement payment rights, have agreed to merge the two companies according to a March 10, 2011 article published by "The Deal Pipeline".
According to the Deal Pipeline article:
- The merger of the two private-backed businesses will be structured as a stock swap.
- JLL Partners, J.G. Wentworth's current stockholders, will own most of the combined companies;
- The parties are still in talks to line up financing.
- The deal may not close for several weeks.
- DLJ Merchant Banking Partners, owned by Credit Suisse AG, purchased Peach Holdings (parent of Peachtree Settlement Funding) for $775 million in November 2006 with co-investments from LLR Partners Inc. and Greenhill Capital Partners.
The announced merger highlights a remarkable financial turnaround for J.G. Wentworth:
- On June 1, 2009, J.G. Wentworth 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 J.G. Wentworth's request, that it would no longer rate J.G. Wentworth's counterparty credit and senior secured debt.
- During this period, J.G. Wentworth laid off 120 of its 200 employees and closed its office in Las Vegas.
- According to industry sources at that time, Wentworth'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, J.G. Wentworth emerged from bankruptcy with an announcement that JLL Partners had invested an additional $100 million in the firm.
For S2KM's complete historic reporting about J.G. Wentworth, see this S2KM blog link.
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