Expert Global Solutions, a business process outsourcing giant, has announced plans to sell part of its accounts receivable management business to Platinum Equity, a Los Angeles-based private equity firm. Financial details of the pending deal were not disclosed.
The proposed sale of the firm's Transworld Systems Inc. includes several business segments within Expert Global: Transworld Systems, Education, Attorney Network, Healthcare Bad Debt, Government and U.S.-based Third-Party Collections. Once the deal is completed, the business is expected to operate as Transworld Systems Inc.
Expert Global is the holding company for collections giant NCO Financial Systems Inc.
In July 2013, the Federal Trade Commission ordered Expert Global, which it described at the time as the world's largest debt collection firm, to pay a $3.2 million fine for allegedly making illegal collections calls and not verifying debts in dispute. The order was the largest fine the FTC had issued against a third-party collector. The FTC said Expert Global and its affiliates violated collection laws by calling consumers several times a day, at unlawful hours and at workplaces. The company also continued to try to collect funds without verifying the debt and even after consumers denied owing it, according to the complaint.
Platinum Equity partner Jacob Kotzubei, who heads the Platinum Equity team that pursued the acquisition, said the opportunity is attractive for multiple reasons. He said Platinum Equity has experience acquiring segments of existing companies, often known as corporate "carve outs," and the firm's operations team has developed a comprehensive plan to ensure an easy transition.
"The business has great leadership, powerful proprietary systems and a strong culture of compliance," he said. "We believe there is a great opportunity to grow the business and maintain the highest standards of excellence by continuing to invest in infrastructure and technology."
The transaction is expected to be completed within the next several months. Credit Suisse Securities (USA) LLC acted as financial adviser to EGS.
Bob Segert, Expert Global president and CEO, said that the sale will allow the firm to "sharpen its focus on our key business segments, services and strengths," including first-party collections.