Collection agencies continued to be bought and sold at a torrid pace during the second quarter of 2017, according to data from Corporate Advisory Solutions.
There were 13 deals in the second quarter of 2017, representing $4.6 billion in enterprise value, compared with 10 deals worth $372 million during the first three months of 2017.
“Investors are consistently looking for sizable, technology enabled platforms that can capitalize on the consolidation of the market,” CAS wrote in its quarterly newsletter. “While increased awareness can be a boom for the industry, many consumer litigation attorneys are also taking notice.”
Companies that are looking to diversify into other categories of debts are doing so via acquisition instead of trying to build from the ground up, CAS wrote. An expectation of reduced regulation is also spurring outside companies to look to the ARM industry as an expansion opportunity, especially as the Department of Education and the Internal Revenue Service are now using outside third-party collection agencies.
The debt-buying market is also poised to grow, CAS wrote. The filing of JH Capital Group to go public is a sign that the market is on the upswing, buoyed by the expectation that more banks are going to resume programs of selling defaulted debt to approved buyers.
On the Revenue Cycle Management side of the business, there were five deals completed during the second quarter, worth $236 million. Change is the constant in the healthcare world these days and that volatility is leading a lot of interested buyers into the sector.
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