Dollar Financial Corp Announces Acquisition of Merchant Cash Advance Business in the United Kingdom

Dollar Financial Corp (NASDAQ:DLLR), a leading international diversified financial services company serving unbanked and under-banked consumers, today announced the acquisition of a merchant cash advance business in the United Kingdom.

The acquired company primarily provides working capital needs to small retail businesses by providing cash advances against a percentage of future credit card sales. As part of the business model, the merchant’s credit card processor, typically a third party bank, directs a predetermined percentage of the merchant’s future daily credit card receivables to the acquired company until the advance is paid back in full. This repayment process substantially reduces any risk of repayment default. The acquired company was “first to market” in the United Kingdom in 2005 and is still the only significant participant in this emerging industry.

Commenting on the acquisition, Jeff Weiss, the Company’s Chairman and Chief Executive Officer stated, “We are very excited about this acquisition, which further diversifies our Company by expanding into the small business financial services market. We believe financing the working capital needs of small businesses is a significantly under-served market with a potential opportunity encompassing approximately 400,000 small retail merchants in the United Kingdom. We enthusiastically welcome the management team of the acquired business into our rapidly expanding Dollar Financial group of companies. This team, along with their proven sales platform, systems and processes, are well positioned to take advantage of the significant opportunities in this growing industry.”

The purchase price for the acquired company, which currently manages a receivable portfolio of approximately $3.0 million, was $4.9 million. The Company anticipates as the growth of the receivables portfolio has been constrained historically by the working capital limitations of the acquired company, Dollar expects this business has the potential to grow substantially in the coming year.

About Dollar Financial Corp

Dollar Financial Corp is a leading diversified international financial services company primarily serving unbanked and under-banked consumers. Its customers are typically service sector individuals who require basic financial services but, for reasons of convenience and accessibility, purchase some or all of their financial services from the Company rather than from banks and other financial institutions. To meet the needs of these customers, the Company provides a range of consumer financial products and services primarily consisting of check cashing, short-term consumer loans, pawn lending, Western Union money order and money transfer products, currency exchange, gold buying, reloadable VISA® and MasterCard® branded debit cards, electronic tax filing, and bill payment services.

At June 30, 2009, the Company’s global store network consisted of 1,206 stores, including 1,031 company-operated financial services stores and 175 franchised and agent locations in the United States, Canada, United Kingdom, Republic of Ireland, and Poland. The financial services store network is the largest network of its kind in each of Canada and the United Kingdom and the second-largest network of its kind in the United States. The Company’s customers, many of whom receive income on an irregular basis or from multiple employers, are drawn to the convenient neighborhood locations, extended operating hours and high-quality customer service. The Company’s financial products and services, principally check cashing, money transfer, pawn lending and short-term consumer loan programs, provide immediate access to cash for living expenses or other needs. For more information, please visit the Company's website at www.dfg.com.

Forward Looking Statement

This news release contains forward looking statements, including statements regarding the following: the Company’s future results, growth, guidance and operating strategy; the global economy; the effects of currency exchange rates on reported operating results, the developing regulatory environment in Canada, the U.K., Poland and the United States; the impact of future development strategy, new stores and acquisitions; the implementation and expected results of restructuring initiatives; and of the performance of new products and services. These forward looking statements involve risks and uncertainties, including uncertainties related to the effects of changes in the value of the U.S. dollar compared to foreign currencies, risks related to the regulatory environments, current and potential future litigation, the integration and performance of acquired stores, the performance of new stores, the implementation and expected results of restructuring initiatives, the impact of debt financing transactions, the results of certain ongoing income tax appeals, and the effects of new products and services on the Company’s business, results of operations, financial condition, prospects and guidance. There can be no assurance that the Company will attain its expected results, successfully integrate any of its acquisitions, attain its published guidance metrics, or that ongoing and potential future litigation or that the various FDIC, Federal, state, Canadian or foreign legislative or regulatory activities affecting the Company or the banks with which the Company does business will not negatively impact the Company’s operations. A more complete description of these and other risks, uncertainties and assumptions is included in the Company’s filings with the Securities and Exchange Commission, the Company’s annual reports and form 10-Q’s and 10-K’s. You should not place any undue reliance on any forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

Dfc Global Corp (MM) (NASDAQ:DLLR)
Historical Stock Chart
From May 2024 to Jun 2024