NCO Group Acquires Loan Servicing Firm

Business process outsource giant NCO Group plans to acquire loan-service firm Systems & Services Technologies Inc. (SST) in a deal between two ARM-industry firms majority-owned or largely controlled by banking behemoth JPMorgan Chase.

Terms of the deal weren’t disclosed. Brian Callahan, NCO’s vice president of financial reporting, told insideARM.com the deal did not require a filing with the U.S. Securities and Exchange Commission.

JPMorgan Chase bought St. Joseph, Mo.-based SST in 2005. Callahan said One Equity Partners, an investment arm of Chase, owns about 85 percent of NCO. One Equity Partners teamed with NCO’s President and CEO Michael J. Barrist and other NCO executives to take the company private in November last year in a deal valued at $1.2 billion.

SST is a third-party collector that has serviced more than $22 billion in auto loan and lease, credit card and commercial equipment loan and lease debt since it began in 1995. It has about 1,000 employees in its two Missouri offices in Joplin and St. Joseph, according to its Web site.

Callahan said the SST acquisition will allow NCO to expand its approach to its collection efforts. “They do loan servicing. We haven’t done a lot of that in the past. This helps us branch out in our service offerings,” said Callahan.

Callahan said the deal is expected to close in the fourth quarter. He declined to comment on any possible changes in SST’s leadership or staff.

SST did not return insideARM’s calls. The Joplin Globe reported yesterday that Glenn Estrella, SST chairman, said the deal meant SST would "grow from a midsize company to another level." Estrella is also a senior vice president with Chase, according to the Globe.

Horsham, Pa.-based NCO is a collector and business process outsource firm with more than 100 operation centers and 22,500 employees that serves clients worldwide.