Report Spotlights ‘Robust’ M&A Activity in ARM Industry

The accounts receivable management industry was valued at $13.4 billion at the end of 2020, and grew at a rate five times faster in 2020 than it had in the preceding five years, according to a report issued by Corporate Advisory Solutions. This year could be just as big for the industry, according to the report, largely because the amount of charged-off debt is expected to grow while the unemployment rate is expected to increase.

Despite the COVID-19 pandemic, the number of deals and the deal value that took place during the fourth quarter of 2020 in what CAS calls the “Outsourced Business Services” market, which includes the ARM industry, was higher than at any other point in the past three years. About 70 deals were done in the fourth quarter of 2020, more than double that occurred during the same period a year earlier, while the total deal amount reached $8 billion. Activity in the Revenue Cycle Management and Customer Relationship Management sectors was more robust than that in the ARM industry, according to the report.

CAS said ARM industry merger & acquisition (M&A) activity in the fourth quarter was “robust” and that revenue and profits in 2021 “are projected to rise” thanks to more consumers continuing to pay off their debts.

There is a reckoning on the horizon, CAS noted, as a result of consumers taking on less debt last year, but when that reckoning will occur is likely a year or two down the road.

CAS noted several trends that are impacting the ARM industry, including increased regulation, more economic stimulus in response to the COVID-19 pandemic, the further expansion of technology, and continued consolidation of companies.

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