M&A transactions in ARM industry (webnotes)

2006

• Collection bureau secures $60M, plans 1,100 hires in 18 months

• Michael Barrist to purchase NCO Group with One Equity Partners represents the largest deal in industry history – valued at over $1 billion.
  
• West Corporation, owner of West Asset Management, of a $4.1 billion recapitalization by private equity firms Thomas H. Lee Partners and Quadrangle Group.
• UK-based Cabot Financial's sale to Nikko Principal Investments for $478 million
• the sale of Baycorp Advantage's Australia-based collection division, Baycorp Advantage Collection Services, to Australia-based private equity firm Allco Equity Partners and Deutsche Bank Capital Partners, for $74 million.
• Collection agency has a strategic alliance with a BPO firm (NARS and ARM join hands)
• First Analysis, a large Research-focused investment firm have half a billion investments in niche companies and infact they recently acquired one of which is Collect America (NFS-alike).
  

Deals summary:

Collecto Moves To Expand By Acquiring ACA Healthcare Management Services

Titan Business Solutions Acquired By Johnson, Morgan & White

Intrum Justitia Acquires Two French Agencies

Bad Debt Buyer Calvary Investments Retains Salomon Smith Barney

NCML Limited Acquires CCS Hunter & Stewart

New Consolidator Patriot Financial Group Acquires Three Collection Agencies

The Revenue Maximization Group Acquired By NCO Group for $15.9 Million

Credit Smart Group Acquired By Repcol

Canada's Nova Collection Services Acquired By AllianceOne

Great Lakes Collection Bureau Acquired By NCO Group

Scottish Agency Stirling Park Acquired By Intrum Justitia For $13 Million

Carma Financial Services Sells Its Consumer Collection Agency Business

Baycorp Advantage Buys Out Remaining Share Of Alliance Group Holdings

Credit Corp Group Acquires Three Companies

Big Shakeout In Bad Debt Internet Auction Sites

Intrum Justitia Acquires Spanish Agency From Equifax

General Revenue Corp Added To Sallie Mae's Agency Acquisition Strategy

Challenger Financial Services Acquired By Thornton Capital Advisors

Pioneer Credit Recovery Acquired By Sallie Mae

Nordan Inkasso Acquired By Aktiv Kapital

Regency TMC Worldwide Acquired By Aktiv Kapital

Recovery Bureau of America Acquired By Canada's Allied Global Holdings

The total value of M&A transactions in the Accounts Receivable Management (ARM) industry will surpass any other year on record, if recent deal announcements close as expected this year. For the first half of 2006, there were 28 completed transactions, two significant pending transactions, plus other pending deals, representing an aggregate estimated deal value of $3.5 billion. By comparison, deal value for all of 2005 – a record year for deal activity – was just over $1.7 billion.

This surpasses last year's record-breaking $1.6 billion in deal activity, which includes all corporate events that involve a sale of equity: mergers and acquisitions, IPO and secondary offerings, joint ventures and strategic partnerships, and minority investments.

This record-breaking level of ARM deal activity is predominantly being fueled by the increased strength of the economy, growing levels of distressed consumer, commercial and government receivables, the receptivity of creditors to place or sell receivables, and the availability of funding for transactions within this industry.

"In 2005, companies and investors were well capitalized and motivated to buy or invest in well-run and growing companies, and the lending markets continued to provide abundant sources of cheap debt to help finance acquisitions. With these market trends, coupled with the ARM industry's ability to provide meaningful returns to investors, it is not surprising that a new record of total deal activity was achieved in 2005," said Mark Russell, Director at Kaulkin Ginsberg.

The debt purchasing sector was particularly active in 2005, generating more than 50% of the year's total deal value. Several leading debt purchasing and ARM companies were recapitalized or acquired in 2005, including Risk Management Alternatives, Collect America, Marlin Integrated Capital, Portfolio Management Group, and Resurgence Financial.