Jefferson Capital, Inc. (NASDAQ: JCAP) announced a secondary public offering of 10 million shares of its common stock, with underwriters Jefferies and Keefe, Bruyette & Woods holding an option to purchase an additional 1.5 million shares at the offering price. The company will simultaneously repurchase 3 million shares at the same price, retiring the shares to reduce the outstanding float. Net proceeds from the offering will be distributed to the selling shareholders, and the transaction is contingent on customary closing conditions and the effectiveness of the Form S‑1 registration statement.
The company is a purchaser and manager of consumer accounts, operating in the United States, Canada, the United Kingdom and Latin America. Jefferson Capital’s balance sheet remains strong, with a price‑to‑earnings ratio of 7.48, a dividend yield of 4.34 % and a financial health score of 3.36, rated “GREAT” by InvestingPro. The firm’s credit profile has been reinforced by a recent upsizing of its revolving credit facility to $1 billion.
In its most recent quarterly report, Jefferson Capital posted revenue of $150.8 million, up 36 % year‑over‑year, and an adjusted earnings per share of $0.74, beating consensus estimates. The company also completed the acquisition of credit‑card assets from Bluestem Brands for $196.1 million, which is expected to generate approximately $310 million in remaining collections. These results underscore the company’s ability to generate robust cash flow and support its capital‑allocation strategy.
The secondary offering provides liquidity to existing shareholders, while the concurrent share repurchase offsets the dilution that would otherwise result from the new shares. By retiring 3 million shares, Jefferson Capital aims to maintain a favorable share count and support earnings per share. The transaction aligns with the company’s broader strategy of preserving a strong balance sheet and returning value to shareholders, even as it continues to invest in growth opportunities.
Investors reacted negatively to the announcement, citing concerns about the increased float and potential dilution. Nonetheless, the company remains focused on its growth trajectory and capital‑structure management, emphasizing that the transaction will not raise new capital but will instead support shareholder value through share count reduction.
The offering and repurchase represent a significant capital‑structure event that will not alter the company’s cash position but will reinforce its balance sheet and shareholder value. The transaction is a major financing move that reflects Jefferson Capital’s disciplined approach to capital allocation and its commitment to maintaining a robust financial foundation while providing liquidity to its shareholders.
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