C&R Software, a debt collection and recovery solutions software firm, has agreed to acquire the financial health fintech SpringFour to expand the reach of both companies, the fintech announced Wednesday.

“Financial health and financial health resources are increasingly more important, and this is a way for us to quickly scale and grow SpringFour and bring SpringFour to more companies [and] to more organizations,” SpringFour CEO Rochelle Nawrocki Gorey told Banking Dive. “More people will get the help they need and deserve.”

The deal closed last week, after talks began last December, Gorey said. Work has begun to introduce the new company to respective clients, she said.

SpringFour aims to add a more human component to this work beyond technological solutions. C&R Software has demonstrated itself to be a highly innovative company, and under the acquisition by the firm, SpringFour plans to continue innovating and bringing new solutions and products to the collections and debt recovery market, Gorey said.

Gorey said C&R demonstrates “empathy” to people experiencing financial hardship, aligning with an interest of SpringFour’s.

After the acquisition, Chicago-based SpringFour, which points customers in need of financial assistance to nonprofit and government resources to help them get back on their feet, will operate as a standalone brand, with Gorey continuing to lead the firm.

“I set out to change the industry, and I think this acquisition loudly demonstrates that, and I'm very excited,” Gorey said.

C&R’s footprint covers North America, the U.K., western Europe, South Africa, Asia Pacific, Australia and New Zealand, with the most extensive customer base in the U.S.

Ed Wallen, C&R Software’s CEO, called the acquisition a growth opportunity in terms of overall client base. The debt solutions platform has more than 550 clients across 62 countries. The company plans to focus primarily on its top 50 clients, which include enterprises, in offering SpringFour platform to make the fastest substantial impact.

“From a business standpoint, it really fits into our strategy ... of bringing more products and services back into our existing client base,” Wallen told Banking Dive.

C&R Software is a subsidiary of Constellation Software. Constellation is one of the largest acquirers of vertical market software companies globally, with a market cap of around $80 billion. Its network spans more than 100 countries with 1,300 subsidiaries, but all the subsidiaries operate in an independent, decentralized manner, he said.

Leveraging bank partnerships

Through C&R’s ownership, the fintech can leverage its vendor relationships, and C&R can make the master services agreements process more straightforward for SpringFour, Wallen said.

With banks, “it's very hard to get onboarded as a vendor and have a master services agreement to do business. What really made sense with this acquisition,” he noted, “is that SpringFour now has access to all of our C&R client base without having to jump through all of those hoops.”

Following the transaction, SpringFour and C&R can access their respective bank partners, where they have a fair amount of overlap, Wallen said.

“I think the biggest opportunity here is to get SpringFour exposed to the C&R client base and really fix that problem of the under-distribution of a great platform,” Wallen said.

He also said Constellation has a buy-and-hold policy, which means SpringFour has found a forever home for itself, and both companies plan to grow with one another. 

SpringFour recently partnered with Cincinnati-based Fifth Third to launch the lender’s reimagined eBus to reach underserved communities. SpringFour also works with BMO, Capital One, KeyBank and M&T Bank, among other banks. 

SpringFour’s global reach

Wallen sees opportunities to expand into other developed countries with social safety net programs, such as Canada, the U.K., Australia and New Zealand.

The U.K. has “consumer duty” regulations from the Financial Conduct Authority that put the onus on financial institutions to treat clients well and help them regain good economic standing. These types of regulations are emerging in other countries and will benefit companies providing services to people experiencing financial hardship, he pointed out. 

“It impacts the population of consumers as a whole because now the cost of credit goes down, access to credit goes up, and so everyone benefits. So it's not just about the people in need,” Wallen said. “This can have an impact on the entire consumer base.”