Debt buyer and collector Portfolio Recovery Associates announced late Tuesday that it would be acquiring MuniServices, LLC, a company that specializes in revenue enhancement and collections in the government sector.

Norfolk, Va.-based Portfolio Recovery (Nasdaq: PRAA) said in a press release that it will pay $24.3 million for MuniServices, $22.5 million in cash and $2.1 million in common stock. But contingency goals based on 2008 and 2009 performance could push the total purchase price to $29.1 million.

The deal is expected to close on July 1 and Portfolio Recovery Associates (PRA) will discuss the acquisition in its second quarter earnings conference call.

Fresno, Calif.-based MuniServices has been in business since 1978. The company offers collection and recovery services, as well as revenue enhancement services -- such as compliance audits -- to state and local governments. MuniServices has 115 employees in offices in California and New Jersey.

As a part of the deal, members of MuniServices’ management team, including President and CEO Marc Herman, have entered into long-term employment agreements with PRA.

PRA CEO and Chairman Steve Fredrickson noted in the release that the acquisition “provides a great complement to our RDS business.” PRA acquired government collector RDS, then known as Alatax, in 2005 (“Portfolio Recovery Associates Acquires Government Collections Firm Alatax for $17.5 million,” Aug. 1, 2005). RDS is a prominent component of PRA’s fee-for-service business line.

At an investor conference last week, PRA said that growing its fee-for-service lines was strategically important and hinted at possible acquisitions in the space (“Portfolio Recovery Fee for Service Business Thriving Despite Anchor Loss,” June 20).