Receivables management company Credit Clear has embarked on a major expansion, announcing the takeover of debt recovery company ARMA Group Holdings.

Credit Clear issued a statement yesterday saying it had entered into a binding agreement to acquire ARMA for A$46 million – 60 per cent cash and 40 per cent scrip – plus an earnout.

The company has completed an institutional placement, raising $25.5 million, and launched a $4 million share purchase plan.

Credit Clear was launched in 2015 and was listed on the ASX in October last year. It offers what it calls a “full-service suite of receivables services, allowing clients to manage communications and payment arrangements with their customers through a digital and mobile interface”.

Its pitch is that it helps clients with better customer engagement and insight, faster payment reconciliations, improved cash flows and lower collection costs. 

It also offers debt recovery services. It has already made an acquisition in that segment, buying a company called Credit Solutions in 2019.

It made a loss of $7.8 million on revenue of $10.9 million in 2020/21. Cash outflow was $3.9 million.

Total assets at June 30 were $22.3 million and cash and cash equivalents stood at $10.7 million.

ARMA has more than 400 active clients. It reported revenue of $15.5 million and EBITDA of $6.4 million in 2020/21.

Credit Clear said the acquisition would expand its customer base and give it exposure to new industry sectors, as well as provide efficiencies through the transition of the ARMA book from “traditional to digital”.