Forum Archive Index - July 2000

[kevin.young@gfmb.co.nz]

MEDIA RELEASE

For immediate release                         Friday, 21 July 2000

RMG IN DEAL TO ACQUIRE AUSTRALIA'S LARGEST COMMERCIAL COLLECTION AGENCY


RMG Limited (NZSE: RMG) has consolidated its position as the region's
largest and fastest growing receivables management company with the
announcement today of the acquisition of Australia's largest collector of
business to business debt, Credit Solutions Australia Pty Ltd, with revenues
of $A10 ($NZ12.6) million.

The acquisition, which involves approximately $A9 ($NZ11.4) million in cash
and shares, is expected to be settled at the end of August, subject to the
completion of due diligence investigations.  Shares will be issued to the
vendors of Credit Solutions at a 6 per cent discount on the average price in
the ten days preceding the announcement, and 90 per cent of these shares
will be subject to escrow until 20 June, 2001.

The acquisition will see RMG Limited's projected revenue exceed $A70
($NZ88.8) million for the year to 30 June 2001.  The transaction will also
increase RMG's market share to about 25 per cent of the Australian
collections market.

Headquartered in Sydney, Credit Solutions has a current staff of about 100,
with offices in each mainland State in Australia.  The merging of the
various sections of the business into the RMG group is expected to be
completed by the end of December, 2000.

RMG's Chief Executive, Mr Paul Cooney, said that the purchase would add
significantly to RMG's expertise and capacity in the area of commercial
collections as well as delivering a number of excellent long term contracts
with some of Australia's leading businesses.

"This acquisition will provide RMG with a dominant position in the
commercial collections market in Australia, complementing the businesses'
leadership in the consumer and retail collections markets," Mr Cooney said.



"The acquisition will provide us with an opportunity to offer commercial
clients access to the recently acquired factoring services and the expanding
range of commercial reporting products available through our Creditnet
International division.

"Credit Solutions also have a strategic partnership with national law firm
Murrays Lawyers, who provide a team of 12 specialist solicitors working
exclusively on behalf of the company and its clients.

"The access to legal services and expertise that this acquisition will bring
will further enhance the range of services available to RMG's clients.

"The additional office space in Baulkham Hills, west of Sydney, will also
satisfy our need to expand our call centre operations, a need that has
emerged since the merger and as a result of new contracts we have won.

 "Since the merger, RMG has won a major contract with one of Australia's
leading finance companies, as well as an increased volume of work from the
major telecommunications providers, all of whom are now RMG clients."

Mr Cooney said Credit Solutions had enjoyed strong growth under its current
management team, who would be retained to assist in further growing RMG's
commercial business services division, particularly its legal services
activities.

 "Recent acquisitions made by RMG have delivered us a strong strategic
footing in the collection and analysis of business information, factoring
and investigations," he said.

"These acquisitions, combined with the strengths and skills of the companies
that initially merged to form the group, mean that RMG is able to offer an
integrated range of receivables, debt management and credit reporting
services under a single umbrella.

"This ability to offer a 'one-stop-shop' is already causing a number of
users of alternative providers to rethink the way they manage their
collections and credit functions.

"We also plan to capitalise on the opportunities that recent acquisitions
have given us by developing strategic alliances with key customers."


Mr Cooney said the consolidation of the various businesses in the group was
proceeding well with rationalisation of resources and sites expected to be
completed by the end of September 2000, as originally forecast.

"We had factored in the need for some reduction in staff numbers at the time
of the merger, but we are in fact finding that we now need to take on more
staff in order to cope with the increase in business and new contracts won
since the merger," he said.

RMG recently announced the acquisition of the prominent West
Australian-based debt recovery agency Laurens & Munns, New Zealand-based
Kiwi Factors, Northern Receivables and Southern Receivables Ltd and
Melbourne-based Total Credit Management Services Pty Ltd, for a total
consideration of $A4.8 (NZ$ 6) million.

Shortly after listing the company also acquired a 25% stake in business data
intelligence company, Atlantis Marketing Limited.

RMG Limited recently completed a successful $A25 ($NZ31) million capital
raising, listing on the Australian and New Zealand stock exchanges last
month (June 2000).

RMG has a staff of over 650, with 28 offices in Australia, New Zealand and
Asia and projected revenue now in excess of $A70 ($NZ88) million per annum.

The company was initially formed by the merger of a number of receivables
management companies in Australia and New Zealand.  Services provided by RMG
include traditional debt recovery and receivables management, credit
information and database management services, debt purchasing, factoring,
ledger management and complete outsourcing of a company's receivables
function through leading edge internet-enabled technology.


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