PRA Group (PRAA) Buys Resurgent Holdings' Canadian Business
PRA Group, Inc. PRAA recently completed the buyout of the holding company of Resurgent Holdings LLC's Canadian business. Post transaction, the acquired entity will now become a wholly owned unit of PRA Group Canada.
In 2017, Resurgent's Canadian business was purchased by Resurgent Holdings LLC from SquareTwo Financial.
This deal will club 25 years of operating experience, which in turn, is expected to create an advanced nonperforming loan business in Canada. The combined entity will have the scale and efficiencies to be able to provide premium service and impressive liquidity to credit originators, who can boost their individual credit services.
Notably, Resurgent will gain from this acquisition agreement as it would help its employees, customers and credit originators, who are willing to sell their nonperforming loans. PRA Group is still witnessing a high volume of non-performing loans at great returns in the United States.
Notably, several strategic acquisitions and alliances positioned the company well for long-term growth. In 2016, PRA Group acquired eGov Systems that further strengthened its government business. In May 2017, the company partnered with the Internal Revenue Service to utilize a new tax methodology for recognizing net finance receivable revenues, effective tax year 2017. The company along with RCB Investimentos forms a collaboration with Banco Bradesco S.A. last October.
The company also acquires finance receivables, for which it has spent a total of $1.1 billion in 2018. PRA Group’s ability to acquire and assimilate businesses in related fields is certainly a long-term positive as the traditional debt collection business matures and becomes more competitive.
Shares of this Zacks Rank #3 (Hold) company have lost 22.8%, wider than the industry’s decline of 12.6%.
Stocks to Consider
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