AUSTIN, Texas, Jan. 19, 2012 /PRNewswire/ -- EZCORP, Inc.
(Nasdaq: EZPW), a leading provider of specialty consumer financial
services, announced today that it has entered into a definitive
agreement to acquire a 60% ownership interest in Prestaciones
Finmart, S.A. de C.V., SOFOM, E.N.R. ("Crediamigo"), a specialty
consumer finance company headquartered in Mexico City.
Crediamigo is one of the top three and fastest growing providers
of payroll deduction loans in Mexico. The company enters into
agreements with various employers that permit it to market
non-collateralized loans to employees. Interest and principal
payments are withheld by the employers through payroll deductions
and paid over to Crediamigo. Crediamigo currently has 170
such agreements, mostly with Mexican governmental agencies and
organizations, and has access to more than 3.5 million
employees. Loan amounts range from MXP
2,000 to MXP 100,000 (approximately $150 to $7,500 USD) and average MXP 16,000 (approximately $1,200 USD), and loan terms range from one to
four years and average 27 months. Crediamigo's current loan
portfolio totals approximately MXP 1.25
billion (approximately $92.6 million
USD).
Paul Rothamel, EZCORP's President
and Chief Executive Officer, stated: "This significant
investment furthers our strategic initiative to diversify our
business. We have been looking for opportunities to grow in
Latin America generally and to
enter into new lines of business that complement our successful
pawn operations in Mexico. This investment in Crediamigo
accomplishes both of those objectives, representing a
high-potential opportunity to expand our business in Mexico to include non-collateralized lending,
which we believe is a growing and underserved segment of the
consumer financial services market. There is undoubtedly some
overlap between our customer base in Mexico and Crediamigo's customer base, and we
believe there are ample opportunities for cross-promotion and
product enhancement, as well as other synergies."
Mr. Rothamel continued: "Crediamigo has a well-respected
board of directors and a strong management team. We have the
right to appoint six of ten board members going forward, and we
anticipate that we will be retaining the leadership and experience
of a number of the current directors. In addition, we fully
expect to keep the current management team in place, and we look
forward to working with them to drive growth in the core business
and to explore value-add synergistic opportunities with our
existing businesses."
Javier Creel Moreno, Crediamigo's
Presidente Ejecutivo, stated: "We are delighted to be
entering into this significant partnership with EZCORP. Since
Crediamigo was founded in 2003, we have built a substantial
business and created a solid platform for growth. We have
been looking for a partner to help us accelerate our growth and
capitalize on significant market opportunities. We believe
that EZCORP is an ideal partner because of its executive leadership
and financial resources, its knowledge of the consumer financial
services market in Mexico and its
existing storefront presence in many of the markets we serve.
We anticipate a long and mutually productive partnership."
Under the terms of the definitive agreement, EZCORP will pay
$38.7 million in cash to the existing
stockholders of Crediamigo and will contribute an additional
$12 million to the capital of the
company alongside $8 million that
will be contributed by certain of the minority shareholders.
This additional capital will be used to repay existing indebtedness
and provide working capital. EZCORP will be obligated to pay
the existing stockholders additional amounts on each of the first
and second anniversaries of the closing if certain financial
performance targets are achieved during 2012 and 2013.
Closing of the transaction is subject to the receipt of certain
third party consents and satisfaction of other customary
conditions, and is expected to occur on or about January 31,
2012.
UBS Investment Bank acted as advisor to Crediamigo in this
transaction.
About EZCORP
EZCORP is a leading provider of specialty consumer financial
services. It provides collateralized non-recourse loans,
commonly known as pawn loans, and a variety of short-term consumer
loans, including payday loans, installment loans and auto title
loans, or fee-based credit services to customers seeking
loans. At its pawn stores, the company also sells
merchandise, primarily collateral forfeited from its pawn lending
operations.
EZCORP operates more than 1,100 pawn, buy/sell and personal
financial services stores in the U.S., Mexico and Canada. The company also has
significant investments in Albemarle & Bond Holdings PLC
(ABM.L), one of the U.K.'s largest pawnbroking businesses with over
160 full-line stores offering pawnbroking, jewelry retailing, gold
buying and financial services; and in Cash Converters International
Limited (CCV.L and CCV.ASX), which franchises and operates a
worldwide network of over 600 stores that provide personal
financial services and sell pre-owned merchandise.
Special Note Regarding Forward-Looking Statements
This announcement contains certain forward-looking statements
regarding the expected results of the proposed investment.
These statements are based on EZCORP's current expectations.
Actual results for future periods may differ materially from those
expressed or implied by these forward-looking statements due to a
number of uncertainties and other factors, including changes in the
regulatory environment, changing market conditions in the overall
economy and the industry and consumer demand for the products and
services offered by EZCORP and its affiliates. For a discussion of
these and other factors affecting EZCORP's business and prospects,
see EZCORP's annual, quarterly and other reports filed with the
Securities and Exchange Commission.
EZCORP Investor Relations
(512) 314-2220
SOURCE EZCORP, Inc.