Portfolio Recovery Associates Expands Legal Services with Acquisition

Accounts receivable management firm Portfolio Recovery Associates, Inc. (Nasdaq: PRAA) announced late Monday that it had acquired a controlling interest in a Pennsylvania firm that specializes in recovering funds and processing payments due under class action claims settlements.

The Norfolk, Va.-based debt buyer said that it has acquired a 62 percent stake in Claims Compensation Bureau, LLC (CCB), based in Conshohocken, Pa. Portfolio Recovery Associates (PRA) has also reserved the right to purchase the additional 38 percent interest in CCB. Terms of the deal were not disclosed.

PRA said that the transaction will open a new business line for the company and that CCB’s earnings will be accretive.

PRA said that it expects that class action activity will continue to represent a large market with billions of dollars in settlements per year in both the securities market and the anti-trust market, a significant percentage of which is not claimed by eligible companies.

"This transaction represents another important diversification for Portfolio Recovery Associates into an exciting, related field,” said Steven D. Fredrickson, Chairman, President and CEO of Portfolio Recovery Associates, in a press release. “CCB pioneered the field of class action settlement recoveries and payment processing, and its founder, Brad Heffler, is the industry’s leading expert. CCB counts many household names on its client roster and has expanded even beyond securities class action settlements and payment processing into antitrust class action settlements.”

Founded in 1996, CCB says that it is a leading provider of class action claims settlement recovery services and related payment processing with over 300 clients, including Fortune 500 companies and large privately held companies. Its process allows clients to maximize settlement recoveries, in many cases participating in settlements they would otherwise not know existed. CCB charges fees for its services and works with clients to identify, prepare and submit claims to class action administrators charged with dispersing class action settlement funds.

Heffler together with Norman Jung, the company’s Head of Operations, will retain their leadership positions, having entered into long-term employment agreements in connection with the transaction.

"We are very excited to be joining Portfolio Recovery Associates, an industry leader that is well-positioned to help us continue to grow and develop new service offerings to roll out to the marketplace,” Heffler said in a statement. “Our company literally created the class action settlement recovery industry, and we intend to remain at its forefront. Like Portfolio Recovery Associates, CCB has been managed from inception by its founders. Both companies share similar cultures and similar management philosophies. We simply could not be a better fit."