United Recovery Systems Acquires ED Collector Enterprise Recovery Systems

Debt collection agency United Recovery Systems (URS) announced Thursday the acquisition of student loan ARM firm Enterprise Recovery Systems (ERS).

Terms of the deal were not disclosed.

ERS is a provider of collection services with offices in Oak Brook, Ill., and clients that include post-secondary education providers, student loan guarantee agencies, and the Department of Education. ERS will continue to operate from its office on Oak Brook, Ill. under the leadership of its current President, Scott Nicholson and the ERS management team.

With the addition of ERS, URS will have a combined total of approximately 1,500 collectors conducting operations from call centers in Houston and Bryan, Texas; Tulsa, Okla.; Tempe, Ariz.; Covington, Ky.; New York City; and Oak Brook, Ill. In addition, the company maintains international offices in Monterrey, Mexico and Delhi, India.

Recently, URS also acquired expertise in late stage collections through the acquisition of the Plaza Associates business as well as both first and third party medical collection expertise through the acquisition of the ACB American business.

Jim Kelleher, President of URS said, “URS is very excited to add the student loan expertise of a market leader such as ERS. This adds a new dimension to the capabilities of URS.”

Commenting on the acquisition, Mark Russell, Director of ARM advisory firm Kaulkin Ginsberg, noted, “Many ARM companies have become enamored with the student loan market due to its recent growth trends. Within this market, the Department of Education contract is by far the most coveted client opportunity available due to its multi-year timeframe and future growth potential. There are several financial and strategic buyers interested in investing into or acquiring ED vendors, and we anticipate more transactions in this market in the near future.”

Scott Nicholson, President of ERS said, “We are proud to partner with URS, a proven leader in the collections industry. Their expertise in collections systems and analytics will allow ERS to improve collections for customers and better opportunities for employees.”

Marion Financial Corp., with an M&A focus in the ARM industry, advised ERS in the transaction.

Headquartered in Houston, URS is a provider of third party contingency debt collection services, specializing in the collection of early-stage pre-charge off and post-charge off receivables for the credit card, retail, and auto loan industries. URS is owned by Audax Group which was founded in 1999 and is a leading investor in lower-middle market companies. With offices in Boston and New York, Audax manages in excess of $5 billion of equity, mezzanine debt, and senior loan capital.