Encore Capital Group, Inc.
) announced an agreement to acquire Michigan-based
Asset Acceptance Capital Corp.
). The purchase consideration amounts to $200 million, based on a
per-share value of $6.50. This amount translates into a 24%
premium on the 30-day volume-weighted average share price of
Encore Capital offered the Asset Acceptance shareholders the
option to choose from cash, Encore Capital shares or a
combination of both to receive their purchase consideration.
However, the total amount of Encore Capital shares to be issued
will not exceed 25% of the total Asset Acceptance equity being
However, the acquisition is subject to the approval of
regulatory authorities as well as Asset Acceptance's
shareholders. Encore Capital expects the acquisition to be
completed by the second quarter of 2013.
Asset Acceptance is proficient in acquiring consumer debt,
with over 50 years of experience in the field. The company also
has an experienced workforce, which will add to Encore Capital's
Following the acquisition of Asset Acceptance's business,
Encore Capital's tally of individual consumer accounts will
increase to 60 million, with total face value exceeding $130
billion. These accounts cover credit card, telecommunications,
consumer loans and other related assets. The acquisition will not
only expand Encore Capital's portfolio, but also enhance its
Encore Capital carries a Zacks Rank #2 (Buy), while Asset
Acceptance carries a Zacks Rank #3 (Hold). Other companies in the
financial sector worth considering are
FleetCor Technologies, Inc.
) - Zacks Rank #1 (Strong Buy) - and
Euronet Worldwide Inc.
) - Zacks Rank #2 (Buy).
ASSET ACCEPTNCE (AACC): Free Stock Analysis
ENCORE CAP GRP (ECPG): Free Stock Analysis
EURONET WORLDWD (EEFT): Free Stock Analysis
FLEETCOR TECH (FLT): Free Stock Analysis
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