Debt buyer Asset Acceptance Capital Corp., based in Warren, Mich., plans to expand its legal collections business in Riverview, Fla. while closing a Tempe, Ariz. collections call center.
As part of the moves, Asset Acceptance will expand its India collection channel and reallocate the inventory from the Tempe collections office.
Also, with the company's investment in the legal collections channel and launch of Recovery Services, a fee for service legal collections business, it will be transitioning its Florida call center collections staff to the legal collections channel. These reallocations are expected to boost "profitability by optimizing channel mix and inventory returns," according to company officials.
The company expects some modest negative cash collections impact during the inventory transition period of September through December 2012. The closing of the Tempe collections office, along with related inventory reallocations is expected to be accretive to earnings on an annual basis by approximately $4 million, or $0.13 per share.
Rion Needs, president and CEO of Asset Acceptance, said, “Office closures are never easy. However, these actions reflect our continued efforts to improve our operating efficiencies and competitive positioning, as well as increase shareholder value. As we have recently discussed, we have been making investments in our legal collections channel that we believe have attractive economics. This is another example of where our improved use of analytics has allowed us to better assess profitability across our inventory and collection networks. We anticipate further operational improvements going forward that are expected to add increased value to our business model.”
Asset Acceptance previously reported a healthy second quarter ended June 30, helped by growth in cash collections.