Loan management, servicing and asset recovery company – Navient Corporation NAVI – seems to be on track with its growth initiatives. Delaware-based company has acquired Texas-based Gila LLC – an asset recovery and business process outsourcing firm. The financial terms of the acquisition deal were not revealed.

Possessing market presence of over 23 years, Gila LLC primarily caters to state governments, court systems and municipalities. With 400 employees, the company serves over 600 clients in 39 states. Widely known as the Municipal Services Bureau, the company offers receivables management services and account processing solutions to its clients. The firm is expected to generate revenues of around $70 million in this year.

Per Navient COO John Kane, “This acquisition accelerates Navient's growth in its services to state and local governments.”

Navient’s asset recovery revenues increased 23% sequentially in fourth quarter 2014. However, asset recovery revenues for full-year 2014 declined 8% year over year. The decline was primarily attributable to The Bipartisan Budget Act of 2013, which led to reduction in the amount paid to guaranty agencies for recovering defaulted FFELP (Federal Family Education Loan Program) loans commencing on Jul, 2014.

Despite the regulatory headwind, we believe the latest acquisition will help lift the company’s asset recovery revenues.

Shares of Navient have gained over 35% since it started operating independently on May 1, 2014 following the strategic spit of Sallie Mae. The company is making gradual progress in its efforts to boost the business. Post split, the company continues to be the holder of a large portfolio of education loans insured or guaranteed under the FFELP, as well as a large portfolio of private education loans.

In Jun 2014, Navient obtained extension of its servicing contract to five more years from the U.S. Department of Education. In Oct 2014, Navient completed the transition of the servicing operations and introduced the Navient brand to its customers. Further, at the end of last year it acquired $8.5 billion of Wells Fargo & Co.’s WFC FFELP loans.

Given such continued efforts, we believe Navient will be able to maintain its leading position in the student lending market.

Currently Navient carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the finance space include Customers Bancorp, Inc. CUBI and Provident Financial Holdings, Inc. PROV. Both the stocks sport a Zacks Rank #1 (Strong Buy).

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