Navient Corporation (NAVI, Financial), the loan management and asset recovery company, is eyeing bigger growth and has embarked upon new growth initiatives. Delaware-based company has took over Texas-based Gila LLC, the asset recovery and business process outsourcing firm. However, the company refused to divulge the financial terms of the acquisition deal.
Mostly state governments, court systems and municipalities are being served by Gila LLC over the past 23 years, during which it held onto a monolithic market presence. There are 400 employees in the company that caters to 600 clients in 39 states. Staunchly known as the Municipal Services Bureau, the company renders receivables management services and account processing solutions to its clients.
Now that Navient Corporation has locked horns with Gila LLC, growth figures are expected to rise up a notch and hit the $70 billion mark this year, which was a distant dream for Navient in the last quarter. The deal comes with much teeth so that both the companies gain optimum growth out of working together.
Previous partner of Gila LLC, Owner Resource Group Managing Director Jon Gormin is all praise for Gila, and he was quoted as saying, “The team at Gila did an outstanding job serving their customers and growing the business. We will miss working with them and wish them well.”
In response, Gila CEO Bruce Cummings said, “Owner Resource Group was an outstanding partner from the moment they acquired us in 2010. They provided the capital and resources that proved instrumental in helping Gila grow our top line by more than 45% during their ownership.”
Navient Corporation is looking to accelerate growth in its services to local and state government which was quoted as saying by Navient COO John Kane.
Quick look at Navient’s business profile
Navient loan management leads its allies to financial success. This is a one of its kind zenith organization that deals in loan management, servicing and asset recovery catering to more than $300 billion in student loans. The company excels at supporting the educational and economic achievements of more than12 million Americans. Navient is trusted by a growing number of government and higher education clients for proven solution to match their financial goals.
In the year 2014, Navient’s asset recovery revenues increased by 23% successively in the fourth quarter. Nevertheless, the year over year asset recovery revenue declined by 8% which was chiefly attributable to The Bipartisan Budget Act of 2013 which caused the amount paid to guaranty agencies for recovering defaulted FFELS (Federal Family Education Loan Program) reduce. However, analysts still believe that the company will tide over the regulatory travails and the latest acquisition will help lift the company’s asset recovery revenues.
Navient’s outlook for buying Gila
According to John Kane, chief operating officer of Navient, “"This acquisition accelerates Navient's growth in its services to state and local governments," he also adds, "We share MSB's strong commitment to client service and the highest standards of ethics and execution. This partnership enables us to offer enhanced value to state and local clients and to successfully recover revenues to fund important public priorities."
As per Bruce Cummings, CEO, Gila."We're delighted to partner with another leader in the field, and welcome the opportunity to grow with Navient and further invest in the services we provide to our clients,"
Parting words
MSB will be stagnant with its management team, headquarters location and staff of nearly 400 people. It is in all likelihood, will generate approximately $70 million revenue in 2015. Analysts are hopeful that the last quarter’s odds will be efficiently smoothened by the deal.
