Lone Star acquires finance firm

The Dallas-based firm has acquired B-Line, which purchases and services bankrupt consumer receivables.

B-Line, a specialty finance firm based in Seattle, was completely acquired by Lone Star Funds yesterday. Financial terms were not disclosed.

Lone Star acquired 100 percent of B-Line’s equity from Golden Gate Capital, B-Line’s founder Bill Weinstein, who will be leaving the company, and other minority investors.

Golden Gate bought its stake in B-Line from The Enstar Group in December of 2003 for approximately $7.7 million in cash net of expenses. Enstar purchased its interest in the firm from management in 1998 for $965,000, including expenses. Since the acquisition, Enstar has recorded net earnings from B-Line of approximately $3.0 million.

B-Line provides services to credit card issuers and other holders of similar receivables. Since its founding in 1997 the firm has serviced more than $45 billion to invest globally in secured and corporate unsecured debt instruments in both chapter seven and chapter 13 cases throughout the US. The firm also purchases credit card receivables and recovers payments on those accounts.

Lone Star has been in the headlines recently because of its troubled investment in Korea. In April, the firm announced it was suing a former employee, Steven Lee, for embezzlement for he undertook while with Lone Star’s operations in Korea. In June, Korea’s Board of Audit and Inspection announced it had found Lone Star to be an “unqualified buyer” for Korea Exchange Bank after an investigation. Korea’s Supreme Prosecutor’s Office is other Lone Star transactions in Korea.

Since 1995 Lone Star Funds has organized private equity funds totalling more than $13.3 billion to invest globally in secured and corporate unsecured debt instruments, real estate related assets and select corporate opportunities.