Portfolio Recovery Associates Inc., a Norfolk, Va.-based debt buyer, Friday announced a $115.3 million acquisition of certain assets from National Capital Management LLC (NCM).

The acquisition includes both secured and unsecured consumer bankruptcy accounts and operating assets associated with the underwriting and collection of secured bankruptcy claims. The transaction also includes the hiring of some NCM employees.

"Since [Portfolio Recovery] began to diversify its business model in 2004 by moving into bankruptcy debt buying and claims processing, we've grown a bankruptcy business that has become a significant contributor to our bottom line. This acquisition provides further diversification by expanding [our] bankruptcy business to include larger secured claims and other assets," said Steve Fredrickson, chairman, president and CEO of the company.

During the first nine months of this year, Portfolio Recovery generated $263.1 million in cash collections from its portfolios of purchased bankruptcy accounts and invested $151.6 million in new, largely-unsecured bankruptcy claims, representing 45% of the company's total consumer debt buying business this year.

The company on Thursday announced the close of a $600 million credit facility to fund business operations and expansion.

Portfolio Recovery in November reported strong results for the third quarter, including increases in cash collections, net income and revenue. In October, a federal appeals court in California ruled that the company must stop using an automatic dialing system to call cell phones without prior consent.

Portfolio Recovery offers a range of business services to local government, auto lenders, law enforcement, institutional investors, manufacturers and retailers and U.K. banks and creditors.

The company was recognized as one of Fortune's 100 Fastest Growing Companies in 2012. It also was named one of Forbes' Top 25 Best Small Companies in America in 2012, and has been annually ranked as one of Forbes' 100 Best Small Companies since 2007.

NCM, based in Memphis, Tenn., purchases and services both secured and unsecured bankruptcy claims, of all maturities, from credit issuers in a range of industries. Founded in 1996, the company invests in these bankruptcy-impaired assets through portfolio acquisitions and forward flow relationships.

 

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