October 5, 2009

NEWS RELEASE
For Immediate Release

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Improving economic conditions likely to increase buyer interest and M&A activity

October 5, 2009: Rockville, MD -- Year-to-date merger and acquisition activity within the debt collection / accounts receivable management industry (ARM) mirrors macro M&A trends; the value of transactions is down from last year. According to Kaulkin Ginsberg, the industry's leading M&A and strategic advisory firm, there were 29 announced transactions with a total deal value of $190.3 million through the first three quarters of 2009 -- compared with 29 deals valued at $1.8 billion at the same point last year.

"The good news is that the economy seems to be showing signs of recovery, which bodes well for the ARM industry as it has historically been one of the fastest sectors to recover from economic recessions," noted Mark Russell, Director at Kaulkin Ginsberg. "Well-managed ARM companies have been focused on maximizing their operational efficiencies, and as a result they will be poised for financial growth as the economy improves. This trend coupled with the expected return of lenders to financing M&A transactions will motivate strategic and financial buyer to close transactions, as they have been sitting on the sidelines for the past year."

2009 ARM M&A activity has been significantly impacted by the economy. The ARM industry experienced a "one-two" punch during the recession; creditors placed more past-due accounts with third-party collection agencies but an increased number of consumers were unable to pay their debts. This caused a decline in liquidation rates in virtually all market segments over the past year -- impacting the financial performance of many ARM companies and thus affecting deal value and/or terms. This trend, combined with the continued difficulty of buyers to secure financing, has hampered deal activity for the year.

"We anticipate some more deals to close in Q4 as sellers already in the market are motivated to complete their transactions before the potential change in capital gains tax takes effect," noted Russell. "However, total deal value in 2009 will most likely end up at around 10-15 percent of deal value generated in 2008." Despite the recession, there has been steady interest from industry buyers looking to capitalize on the economic times by expanding through acquisition. Almost all transactions this year have been characterized by industry buyers acquiring smaller ARM companies, and that activity is likely to continue. Many of these deals have gone unpublicized, and have often involved smaller ARM companies or companies in distress.

Contact:
Mark Russell
Tel: 240-499-3804
mark@kaulkin.com

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