Dollar Financial Corp Announces Agreement to Acquire the Leading Internet Lending Bus. in the United Kingdom; Company Continu...
December 31 2010 - 4:00PM
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
entered into an agreement to acquire Purpose U.K. Holdings Limited
(“Purpose”), a provider of online payday loans in the United
Kingdom operating under the brand name PaydayUK. PaydayUK, which
has been operating since 2003, is the market leader in the region,
providing loans through both internet and telephony-based
technologies throughout the United Kingdom. The completion of the
acquisition, which is contingent upon several closing conditions,
including the review and approval of the transaction by the Office
of Fair Trading and the receipt of any necessary financing by
Dollar to fund a portion of the purchase, is expected to take
approximately 90 days.
Commenting on the acquisition, Jeff Weiss, Dollar’s Chairman and
Chief Executive Officer, stated, “This acquisition will solidify
our position as a leading provider of internet loans across the
United Kingdom. In concert with our more than 350 company-operated
stores in the country, which provide short term consumer loans,
secured pawn lending, gold purchasing, check cashing, money
transfer, foreign exchange, and a number of other products and
services, the expansion of our internet lending platform further
strengthens and secures our position as a leading provider of
financial services to the unbanked and under-banked consumers in
the United Kingdom. We are excited to welcome the Purpose
management team into the Dollar Financial family and look forward
to leveraging their scalable technology platform, strong business
acumen and industry expertise, alongside our corporate credit
analytics group in the future expansion of our global internet
lending platform both within the United Kingdom, as well as other
countries in Europe, and to Canada.”
Mr. Weiss continued, “It is our mission to be the leading global
provider of financial services to the under-banked and unbanked
consumer, which we refer to as the ALICE demographic (or asset
limited, income constrained, employed). The ALICE customer segment
is increasing all around the globe, and we are squarely focused on
expanding our set of products and services and sales channel
delivery platforms in existing and new markets to meet their
growing needs. As part of this plan, we expect to continue to
invest in new technologies through both internal development and
the acquisition of new businesses. This will allow us to deliver
our many products and services through the most convenient means
our consumers are most accustomed to, and comfortable with, in each
market. This collectively may include a “bricks and mortar” store
based model, a global internet platform, SMS cell phone technology,
the in-home loan servicing model widely used throughout Poland and
Eastern Europe, or other new technologies and platforms that we are
either in the process of developing internally or are looking to
acquire. Additionally, we have experienced very little
cannibalization of our store based business from our existing
internet sales channel, implying the expansion of our internet
platform is also allowing us to reach an entirely new customer
demographic in the market place.”
The anticipated purchase price of the acquisition is $195.0
million. The trailing twelve months EBITDA for Purpose is currently
approximately $32.0 million. Dollar anticipates the acquisition
will be immediately accretive to earnings, and expects to update
its earnings outlook for fiscal 2011 to include the Purpose
business, net of acquisition and transition costs, after the
transaction is finalized. Stephens Inc. has served as the Company’s
financial advisor on the transaction and has delivered a fairness
opinion to Dollar’s Board of Directors.
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 currently provides a range of
consumer financial products and services in seven countries:Canada,
the United Kingdom, the United States, the Republic of Ireland and
Poland, and as a result of its recent acquisition of Sefina
Finance, Sweden and Finland. Our customers for reasons of
convenience and accessibility typically 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:
pending or 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; expected financing initiatives; 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, obtain acceptable
financing, 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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