JG Wentworth owners may have to settle for a reduced payment.
One of the best-known structured settlement firms, set up by its owner, New York-based private equity firm JLL Partners, has attracted up to 20% less than its asking price of $ 1 billion, learned The Post. .
No less than eight private equity firms, including Blackstone Group, Apollo Global Management and TPG, are considering buying the Radnor, Pa., Based company, sources said.
The bidding process still has a way to go and JLL could still get its $ 1 billion price tag, a person familiar with the process warned.
JG Wentworth, who controls more than 50% of the structured settlements market, has been a money generator for JLL, generating around $ 100 million in annual EBITDA, or earnings before interest, taxes, depreciation and amortization, said sources.
Still, JLL’s asking price of nearly 10 times EBITDA may give some potential buyers pause, a source said.
Another potential hurdle to selling is that the business operates in a highly scrutinized financial arena.
Known for his TV spots featuring opera characters singing “I Need The Money Now”, JG Wentworth is the dominant player in a niche finance industry that buys legal settlements, lottery wins. and other fixed annuity payments from clients in exchange for a lump sum Upfront payment.
JLL Partners, which initiated the sale of the 21-year-old company just over a month ago, paid around $ 170 million for a 70 percent stake in JG Wentworth in 2005. It has since increased its 100 percent participation.
JLL reportedly hired Deutsche Bank and Moelis & Co. to organize the auction.
He hopes to close the sale next month.