BETHESDA, MD – The first half of 2005 showed brisk M&A activity in the Accounts Receivable Management (ARM) industry, with 26 transactions completed totaling over $350 million in estimated deal value. By comparison, the first two quarters of 2004 generated 24 transactions totaling more than $753 million in total deal value.
According to Mark Russell, Senior Associate at Kaulkin Ginsberg Company, “2005 is shaping up to be another busy year for deal activity in the ARM sector, with strategic and financial buyers continuing to seek out M&A opportunities. While aggregate deal value in the first half of the year was significantly less than last year’s record-breaking pace, the second half of 2005 has the potential to produce as much – if not more – than the same period in 2004.”
2Q05 confirmed that financial buyers are still motivated to find deal opportunities in the ARM sector, with two leading private equity firms, GTCR and Alchemy Partners, announcing platform investments in the second half of the quarter: GTCR acquired a majority stake in Zenta Technologies, an ARM and business process outsourcing company, through its portfolio company H-Cube; and Alchemy Partners, based in London, UK, acquired a majority stake in Wescot Credit Services, a leading UK based debt purchasing and collection agency.
Early announcements in 3Q05 show that strategic buyers also remain highly active in the ARM market: NCO Group (NASDAQ: NCOG) announced its $118.8 million acquisition of RMA, and GECIS announced its acquisition of Creditek Corporation.
Looking to the second half of 2005 and beyond, Kaulkin Ginsberg expects to see continued interest in debt purchasing companies and contingency collection agencies with experienced management teams, blue chip clients, and substantial growth opportunities.
A comprehensive wrap-up of Q2 M&A deals will be published in the next issue of The Kaulkin Ginsberg Bulletin at the end of July. To read the Bulletin online, please visit: http://www.kaulkin.com/newsletters/bulletin.
About Kaulkin Ginsberg Company
Since 1989, Kaulkin Ginsberg has provided solutions to accounts receivable management and other business services industries. Through the SAGE program (Strategic Analysis, Growth and Exit), they work with owners and executives in their efforts to grow or exit their business. Services include merger, acquisition and valuation advice, research, growth and operational consulting as well as training and executive search services. Kaulkin Media publishes CollectionIndustry.com and Credit & Collection Daily, and is the most popular source of industry information. Kaulkin Partners brings the latest technology to creditors and collectors. Read more about Kaulkin Ginsberg at www.kaulkin.com.
