Altisource Portfolio Solutions announced last week that it is selling its financial services business to Transworld Systems, a provider of accounts receivable management, healthcare revenue cycle and loan servicing solutions.
Altisource’s financial services business includes Nationwide Credit, a provider of collections, customer relationship management and call center outsourcing for the financial, retail credit, mortgage servicing, insurance, utility, and hospitality industries.
Nationwide Credit has approximately 2,300 employees and operations centers in the United States, India, and the Philippines.
And now, the company is part of a sale to Transworld Systems.
According to the companies, Transworld will pay $44 million to acquire Altisource’s financial services business. The deal consists of an up-front payment of $40 million, and an additional payment of $4 million that is to be paid on the one-year anniversary of the sale closing.
As part of the deal, the companies will also enter into a “transition services agreement that will provide for the management and orderly transition of certain services and technologies to [Transworld] after the sale closes.”
According to Altisource, the company estimates that it will recognize a pretax gain of more than $20 million from the sale, and plans to use the $40 million up-front payment to repay a portion of its senior secured term loan.
“In 2018, we established Project Catalyst to streamline our organization and focus on our larger opportunities. The anticipated sale of our financial services business furthers this objective and supports the continued deleveraging of Altisource’s balance sheet,” Altisource CEO William Shepro said.
“If completed, the sale will provide the customers and employees of the financial services business a partner in TSI that is a leader in the customer relationship management and collections industries,” Shepro added. “We look forward to completing the transaction and continuing to work closely with TSI on the transition to provide a seamless experience for our customers.”
As for Transworld, the company said that the acquisition will expand its business worldwide.
“The acquisition of the Altisource financial services business broadens TSI's customer base, expands our offerings into customer relationship management, and grows our global operations in India and the Philippines,” Transworld CEO Joseph Laughlin said.
“This carve out is a perfect example of our strategy to leverage acquisitions to add new technological capabilities while improving scale in our core businesses,” Laughlin added. “We look forward to partnering with the Altisource management team to affect a smooth transition and we welcome the Altisource financial services customers and employees to the TSI family.”
The companies expect the deal to close before the end of the third quarter.