J.C. Flowers-Backed Jefferson Capital Eyes $1.1 Billion Valuation in US IPO

FILE PHOTO: The Nasdaq logo appears at its market site in Times Square, New York City, on December 3, 2021. (REUTERS/Jeenah Moon)

By Arasu Kannagi Basil

(Reuters) – Jefferson Capital, backed by private equity firm J.C. Flowers, announced on Friday its plans for a U.S. initial public offering (IPO). The company aims for a valuation of up to $1.1 billion, reflecting growing confidence in the IPO market.

Jefferson and some existing investors plan to raise up to $170 million by offering 10 million shares. The shares are expected to be priced between $15 and $17 each. Notably, this would mark a rare public debut for a company in the debt-buying industry.

As pressure mounts to return capital to investors, many buyout firms are turning to IPOs to unlock value. Additionally, the recent success of new stock listings has boosted the IPO market, particularly for companies insulated from tariffs.

Jefferson is marketing 625,000 shares, while selling stockholders, including investment firm J.C. Flowers, are offering about 9.4 million shares.

“Investors who seek a different type of company will be interested in this IPO,” said Jeff Zell, senior research analyst at IPO Boutique. Additionally, Jefferson offers a quarterly dividend of $0.24, which likely supports the investment case, Zell added.

Founded in 2002, Jefferson buys and manages charged-off and bankruptcy receivables. Its operations are mainly in the U.S., Canada, the UK, and Latin America.

The Minneapolis-based company competes with PRA Group and Encore Capital Group in the U.S. market. Moreover, it expanded into Canada by acquiring Canaccede Financial Group in 2020.

Zell explained that Jefferson’s sector is not usually attractive to typical IPO investors. However, there are positive aspects, such as strong financial results.

For example, the company’s profit increased by 15.6% to $128.9 million in 2024. Also, revenue grew 34.1% to $433.3 million.

J.C. Flowers bought Jefferson from Flexpoint Ford in 2018. After the IPO, it will own about 68.9% of the company.

Jefferson will list on Nasdaq under the symbol “JCAP.” Furthermore, Jefferies and Keefe, Bruyette & Woods are the lead underwriters.