Dollar Wraps Up Risicum Deal - Analyst Blog
July 07 2011 - 9:00AM
Zacks
Yesterday, Dollar Financial Corp. (DLLR) announced the
completion of its acquisition of Finnish internet loan provider
Risicum Oyj for $46 million. This move is in sync with Dollar’s
strategy to grow its global internet lending business.
Dollar Financial is already a leading pawn lender in
Scandinavia. With the acquisition of the Risicum technology and
products, which are suitable for the Scandinavian and Baltic
region, the company further expands and fortifies its presence in
Finland and Sweden.
Dollar intends to tap the fast-growing underbanked and unbanked
consumers, whom it refers to as ALICE or asset constrained, limited
income, employed people. Moreover, it is targeting these customers
by e-commerce technology rather than investing in physical stores,
thereby saving unnecessary expenses and ensuring quick online
transactions for customers.
In an effort to further diversify its global footprint, product
set and sales channel strategies, Dollar completed a number of key
acquisitions in fiscal 2010. These include the acquisition of a
leading pawn-lending Scandinavian company, Sefina Finance AB, for
approximately $73 million in cash in December 2010, the acquisition
of Swedish Internet lending business Folkia Group AS for $28
million in August 2010, and the acquisition of Suttons &
Robertsons, the fourth-largest pawn-broking business in the UK, for
£15 million in April 2010. The acquisitions are expected to provide
the next generation of growth for the company.
In April 2011, Dollar Financial U.K. Ltd., Dollar’s wholly-owned
U.K. subsidiary, completed the acquisition of Purpose U.K. Holdings
Limited for $195 million.
Dollar’s 2009 acquisitions included Optima, S.A., a door stop
lending business in Poland, Merchant Cash Express business, and
Dealer’s Financial Services, which provides fee-based auto lending
and insurance services to military personnel in the United
States.
As a result of the company’s successful acquisition and product
development strategy, revenue generated from new products and
geographies acquired or developed over the last two years accounted
for approximately 17.0% of the total consolidated revenue for
fourth quarter 2010 and 22.0% of total adjusted EBITDA.
Dollar’s active acquisition strategy over the past couple of
years reflects its aggressiveness to expand globally. The company
has a robust pipe-line of global acquisition candidates, along with
considerable investible cash and a new long-term debt structure
that provides the needed flexibility to act on such opportunities.
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