Encore Capital Closes Asset Acceptance Acquisition; Provides More Detail on Operations

Debt buyer Encore Capital Group, Inc. (NASDAQ: ECPG) announced late Thursday that it has closed its acquisition of rival Asset Acceptance Capital Corp. The company said that all operating subsidiaries of Asset Acceptance are now part of Encore Capital Group. Asset Acceptance’s stock, NASDAQ ticker symbol AACC, will now be delisted.

Combined, Encore and Asset Acceptance have purchased over 60 million individual consumer accounts, including credit card, telecommunications, consumer loans and other related assets, with a face value of over $130 billion.

“The acquisition of Asset Acceptance provides us not only with an additional portfolio, but also with valuable operations capabilities and synergy opportunities,” said Encore’s President and CEO Ken Vecchione. “Consumers also stand to benefit as we extend Encore’s industry-leading Consumer Bill of Rights to millions more people who are on their way to financial recovery.”

Encore said that the combined platforms will allow for deeper consumer insights and analytics, which will help achieve more focused segmentation and targeting to drive better collections. Encore will leverage its lower cost platform and global footprint to drive down Asset Acceptance’s cost-to-collect.

The company noted that Asset Acceptance has a well-established internal legal group, which will accelerate Encore’s internal legal initiative and bring more advanced technological capabilities to Encore.

San Diego-based Encore acquired Asset Acceptance for $6.50 per share, which represents a total equity value of approximately $200 million and a 24 percent premium to AACC’s 30 day volume weighted average share price at the time the deal was announced.

Encore has been acquiring competitor portfolios since 2001 and has developed expertise in valuing, managing and integrating large transactions. Encore made two significant portfolio acquisitions last year alone and has already successfully integrated them into its operational platform.

Encore also recently announced an agreement to acquire a controlling stake in United Kingdom and Ireland-based Cabot Credit Management, signaling the company’s first international expansion.

“Acquisitions like these position Encore as a domestic and global leader in the consumer debt purchase and recoveries industry,” said Mr. Vecchione. “These significant investments are a key component of our long-term growth plan, and the people that join us as part of these new relationships enhance our already deep, talented team.”