Additional Commentary on the Portfolio Recovery Associates Acquisition of AlaTax

Kaulkin Ginsberg Company announces the acquisition of Alatax, Inc., a privately held company that specializes in government receivables management, by Portfolio Recovery Associates, Inc. (Nasdaq: PRAA), a company that purchases, collects and manages portfolios of defaulted consumer receivables. Kaulkin Ginsberg Company served as advisor to Alatax on this transaction.

The acquisition, which was completed on July 29, 2005, after the market closed, has a total price of $17.5 million, consisting of $16.1 million in cash and $1.4 million in Portfolio Recovery Associates common stock. Alatax’s two top executives, President Kennon Walthall and Executive Vice President Stephen Morris, have both signed long-term employment agreements and will continue to manage the company.

Portfolio Recovery Associates anticipates the acquisition will be accretive to earnings beginning immediately.

“Alatax represents an important investment for Portfolio Recovery Associates, providing us with entry into the large market for government account receivables management and creating yet another growth engine for the company. This transaction follows our strategy of selective acquisitions that bring us complimentary skills and expertise. In terms of its competencies, operating methods, philosophy and management, Alatax is a perfect fit for Portfolio Recovery Associates. We are excited to welcome Kennon, Stephen and the entire Alatax team to PRA,” said Steven D. Fredrickson, Chairman, President and Chief Executive Officer of Portfolio Recovery Associates.

Alatax, based in Birmingham, Ala., was founded in 1980 and has become a leading provider of outsourced business revenue administration, audit and debt discovery/recovery services for local governments – a growing segment of the debt collection industry. Alatax has a workforce of about 80 employees and contractors. Although most of its clients are located in Alabama (where it operates as Alatax), the company recently has begun expanding into surrounding states where it operates as Revenue Discovery Systems (RDS).

“Alatax is proud to be joining Portfolio Recovery Associates, a dynamic and customer-oriented company with a clear focus on steady, disciplined growth,” said Kennon Walthall, President of Alatax. “Together with PRA, we will continue to cement our leading position in the government collections market. Now, as part of a larger organization with greater resources, we will be able to more quickly refine and strengthen our current services as well as speed up the development and deployment of additional services we have in our development pipeline. Our current and future government clients will also benefit from the multi-state presence of PRA.”

“We were initially intrigued when Kaulkin Ginsberg introduced us to PRA, and after meeting with Steve and his team, we quickly saw great synergies and growth potential,” said Walthall. “We are very pleased with the outcome of this transaction and Kaulkin Ginsberg’s ability to help us locate the right partner for Alatax.”

Mark Russell, Senior Associate of Kaulkin Ginsberg Company, added. “Alatax brings a lot to the table as a market leader in the fast-growing government services sector. With PRA’s support, Kennon and his team will be able to expedite their growth strategy and generate substantial value for PRA shareholders.”

About Portfolio Recovery Associates, Inc.
Portfolio Recovery Associates a leading firm specializing in the purchase, management and collection of charged off consumer debt. Founded in 1996, PRA went public in 2002 (NASDAQ: PRAA) and has more than 800 employees in three states – Virginia, Kansas and Nevada. Since its inception, the firm has acquired in excess of $10 billion of accounts and 5,000,000 customer relationships. For more information, please visit www.portfoliorecovery.com.

About Alatax
Alatax provides efficient outsourcing services for tax and debt collection, financial management and auditing, data entry and processing, and license compliance to public and private companies and governments. The firm was founded as PASH & Co. in 1980 as a developer of sales tax software for cities and counties. PASH was renamed Alatax when it expanded services to business tax collection, auditing and compliance services for Alabama cities and counties. Based in Birmingham, Alabama, the firm now serves more than 245 cities and counties in the United States. For more information, please visit www.alatax.com.

About Kaulkin Ginsberg Company
Kaulkin Ginsberg Company is a leading advisor to the Outsourced Business Services sector, advising on more than 100 ARM transactions with deal values over $2.5 billion since 1992. Kaulkin Ginsberg manages acquisitions and divestitures, locates strategic or financial partners, provides debt and equity funding sources, conducts market research, and provides consulting services. Read more about Kaulkin Ginsberg at www.kaulkin.com.