SAN DIEGO (AP) -- Encore Capital is adding to its share of the debt collection market by buying a competitor, Asset Acceptance, for about $200 million.
Encore, which is based in San Diego, said Wednesday that it will pay $6.50 per share for Warren, Mich.-based Asset Acceptance, 13 percent higher than the company's closing stock price Tuesday.
Asset Acceptance Capital Inc. shares rose 66 cents, or 11.5 percent, to $6.42 in morning trading. Encore Capital Group Inc. stock added $1.17, or 3.9 percent, to $31.24.
Both companies take on and then try to collect payments from consumer loans that have fallen into default. Combined, the two companies have bought over 60 million individual consumer accounts, including credit card loans, Encore said.
Encore has been growing by buying loan portfolios from competitors, with two big transactions last year. Buying Asset Acceptance could also help it cut costs, Encore said.
Assuming the deal is approved by regulators and Asset Acceptance shareholders, it's expected to close by the end of June.
Encore will pay Asset Acceptance shareholders in cash, stock or a combination of the two.
Also on Wednesday, Asset Acceptance said its fourth-quarter net income tumbled 94 percent, hurt by higher costs and lower sales, to $240,000, or 1 cent per share. Revenue fell 8 percent to $51.7 million.