Dollar Financial Corp Consummates Previously Announced Acquisition of Sefina, the Leading Pawn Lending Business in Scandinavia
December 31 2010 - 8:00AM
Business Wire
Dollar Financial Corp (NASDAQ:DLLR), a leading international
diversified financial services company serving primarily unbanked
and under-banked consumers for over 30 years, today announced that
its wholly owned U.K. subsidiary, Dollar Financial U.K. Ltd., has
completed the acquisition of Sefina Finance AB, a leading
Scandinavian pawn lending business with headquarters in Stockholm,
Sweden. Sefina, which has more than a 125 year operating history,
is the market leader in the region providing pawn loans primarily
secured by gold jewelry, diamonds and watches, through its 16 store
locations in Sweden and 12 stores in Finland.
The total cash consideration for the acquisition is
approximately $73.0 million, of which $58.0 million was cash paid
at closing with the remaining approximately $15.0 million of
additional cash to be paid in installments during calendar year
2011, and there is a contingent earn-out arrangement based on the
financial performance of the acquired business over the next two
years. The Company also assumed Sefina’s existing working capital
lines of credit associated with a number of Scandinavian banks,
which aggregated to approximately $60.0 million upon the closing of
the acquisition, are secured by the value of Sefina’s pawn pledge
stock, and have average interest rates of approximately 4%.
Including transition costs, the EBITDA contribution for the
acquired stores is expected to be approximately $6.0 million for
the remainder of the Company’s fiscal year ended June 30, 2011. The
Company anticipates it will update its earnings outlook for fiscal
2011 to include the Sefina acquisition and the related purchase
accounting adjustments when it releases its fiscal second quarter
earnings results for the three months ending December 31, 2010.
Commenting on the acquisition, Jeff Weiss, the Company’s
Chairman and Chief Executive Officer, stated, “The expansion of our
pawn lending business globally is a key element of the Company’s
long-term growth strategy and is in keeping with our focus on the
ever expanding ALICE (or Asset Limited Income Constrained)
demographic. There appears to be a significant on-going shift
within the more developed economies of the world towards service
sector employment and lower paying jobs, as manufacturing and some
other higher paying occupations are off-shored to developing
countries where labor is less expensive. As such, the average wage
rate for the ALICE demographic is continually shrinking against the
rising tide of higher costs for food, gasoline, health care and
other basic necessities. As the number of people like ALICE
increase all around the globe, we are intently focused on expanding
our set of products and services and sales channel delivery
platforms in existing and new markets to meet their growing
financial services needs, of which pawn lending is a key
component.”
About Dollar Financial Corp
Dollar Financial Corp is a leading international diversified
financial services company primarily serving unbanked and
under-banked consumers and small business owners for over 30 years.
Through its retail storefront locations as well as by other means,
such as via the Internet, the Company provides a range of consumer
financial products and services in seven countries (Canada, the
United Kingdom, the United States, the Republic of Ireland, Sweden,
Finland and Poland) to consumers who, 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. The Company’s products, principally its short-term
consumer loans, check cashing services, secured pawn loans and gold
buying services, provide customers with immediate access to cash
for living expenses or other episodic needs. The Company also
offers high-value ancillary services, including Western Union money
order and money transfer products, electronic tax filing,
reloadable VISA® and MasterCard® debit cards, foreign currency
exchange, and other services. In addition, through its branded
Military Installment Loan and Education Services, or MILES®
program, the Company provides fee based services to enlisted
military personnel applying for loans to purchase new and used
vehicles that are funded and serviced under an exclusive agreement
with a major third-party national bank.
At September 30, 2010, the Company’s global retail operations
consisted of 1,193 locations, including 1,067 company-operated
financial services stores and 126 franchised and agent locations,
conducting business primarily under the names Money Mart®, Money
Shop®, Insta-Cheques®, The Check Cashing Store®, and MoneyNow® in
Canada, the United Kingdom, the United States, the Republic of
Ireland, and Poland. For more information, please visit the
Company's website at www.dfg.com.
Forward Looking Statement
This news release contains forward looking statements,
including, among other things, statements regarding the following:
recent acquisitions; 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., the United States, and
other countries; the impact of future development strategy, new
stores and acquisitions; litigation matters; and the performance of
new products and services. These forward looking statements involve
risks and uncertainties, including risks related to: the regulatory
environments; current and potential future litigation; the
identification of acquisition targets; the integration and
performance of acquired stores and businesses; the performance of
new stores; 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; and
uncertainties related to the effects of changes in the value of the
U.S. Dollar compared to foreign currencies. There can be no
assurance that the Company will attain its expected results,
successfully integrate any of its acquisitions, or attain its
published guidance metrics, or that ongoing and potential future
litigation or the various FDIC, Federal, state, Canadian, U.K. 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 Forms 10-Q
and 10-K. You should not place any undue reliance on any
forward-looking statements. The Company disclaims 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.
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