Irish businessman nets £25m from sale of debt collection firm

Former Irish schoolboy international footballer Martin Dunphy netted a £25 million (€30 million) windfall yesterday after a UK debt collection company he founded more than a decade ago was sold for £295 million in cash.

Mr Dunphy owned 20 per cent of Sussex-based Marlin Financial Group, which has been sold to Cabot Credit Management. That put a £59 million valuation on Mr Dunphy's stake, but debts associated with the company meant the sum he received was "more than £25 million".

This is his second bite of the cherry, having made about £5 million from the sale of a majority stake in the business to private equity group Duke Street in 2010. That transaction gave Marlin the financial firepower to grow its business aggressively over the past few years.

"It's been a 12-year journey," Mr Dunphy told The Irish Times yesterday. "I'm going to take a rest now."

The Waterford-born executive is cutting his ties completely with Marlin. “I’m off to do other things. There are a couple of things I’m looking at in eastern Europe, in Turkey, Romania, Bulgaria and Russia.”

He is prevented from competing with Marlin in the UK for two years.

Charity events
Mr Dunphy is planning a couple of charity events this year, climbing Kilimanjaro with his daughter, and taking part in a car rally with his son.

Mr Dunphy moved to the US at the age of 18 on an athletics scholarship with George Mason University. Having qualified with a marketing degree and an MBA, he set up a telecoms company in China and Taiwan in 1996 and spent three years with International SOS, a global medical services company, in Beijing and London.

He founded Marlin in 2002. The company deals in buying distressed unsecured debts from financial institutions that it then seeks to collect over a 10-year period.

“We write cheques to banks and take assets that the banks aren’t particularly good at managing,” he said.

Mr Dunphy said that if the company paid 10 pence in the pound to buy a debt, it typically looked to recover twice that sum from the person who had borrowed the money over the course of a decade.

Marlin’s activities are unregulated, although Mr Dunphy said it complied with the same code of conduct used by regulated lenders.

Mr Dunphy’s family live in Virginia in the US and he has been commuting for the past five years. He also owns a property in Kilkenny.

Would he consider investing some of his windfall in Ireland?

"I've been over a couple of times to look at the IBRC process [the sale of Irish Bank Resolution Corporation loans by the special liquidators]. It's been very efficient and they've got some good prices. I'd be happy to do something in Ireland."

Mr Dunphy played in goal for an Irish schoolboy team that won a European championship in 1982 in France.

“ My father Vinny played in goal for Waterford in the League of Ireland and my son plays in goal now. Unfortunately, none of us [on the Irish team from 1982] made it in football.”

The last set of accounts filed by Marlin shows that it made an operating profit of £7.5 million on turnover of £42.7 million.

However, it was pushed into the red by interest costs associated with its net debt of £121 million.

Mr Dunphy said this reflected the timing of the purchase of debt by the company and that turnover last year rose to more than £60 million.