Rent-A-Center Completes Acquisition of Merchants Preferred
August 14 2019 - 09:00AM
Business Wire
Rent-A-Center, Inc. (NASDAQ: RCII) (“Rent-A-Center” or the
“Company”) today announced that it has completed the previously
announced acquisition of substantially all of the assets of C/C
Financial Corp d/b/a Merchants Preferred (“Merchants Preferred”), a
nationwide provider of virtual rent-to-own services. This
transaction is expected to accelerate Rent-A-Center’s virtual
rent-to-own growth.
“We are thrilled to welcome Merchants Preferred into the
Rent-A-Center family. Merchants Preferred complements our existing
capabilities and the combined organization will have the most
comprehensive offering in the industry,” stated Mitch Fadel, Chief
Executive Officer of Rent-A-Center. “Merchants Preferred brings a
proven technology platform, scalable infrastructure and a strong
centralized retail partner support team that will enable us to
execute against our growth goals in the over $20 billion virtual
rent-to-own industry,” said Fadel.
With the close of the deal, Joe Corona, President and Chief
Executive Officer of Merchants Preferred, now joins Rent-A-Center
and will continue to lead the virtual strategy. “We are excited to
join the Rent-A-Center team and scale the technology platform and
capabilities we have worked hard to build over the last seven
years,” stated Joe Corona.
Rent-A-Center has updated its annual revenue, net debt and net
debt to adjusted EBITDA guidance to reflect the expected impact of
the Merchants Preferred acquisition. The Company will include
Merchants Preferred in the Acceptance Now segment. Revenue in the
segment is now expected to be $725 million to $745 million, up from
$700 million to $715 million. Due to the funding of the acquisition
the Company expects net debt to be $225 million to $195 million, up
from $195 million to $165 million. Additionally, net debt to
adjusted EBITDA is expected to be 1.0 times to 0.7 times, up from
0.9 times to 0.6 times.
Additional details can be found on the Company’s investor
relations website at https://investor.rentacenter.com in the
presentation titled ‘RCII Q2 2019 – Revised Guidance’.
About Rent-A-Center, Inc.
A rent-to-own industry leader, Plano, Texas-based,
Rent-A-Center, Inc., is focused on improving the quality of life
for its customers by providing them the opportunity to obtain
ownership of high-quality, durable products such as consumer
electronics, appliances, computers, furniture and accessories,
under flexible rental purchase agreements with no long-term
obligation. The Company owns and operates approximately 2,200
stores in the United States, Mexico and Puerto Rico, and
approximately 1,100 Acceptance Now kiosk locations in the United
States and Puerto Rico. Rent-A-Center Franchising International,
Inc., a wholly owned subsidiary of the Company, is a national
franchiser of approximately 320 rent-to-own stores operating under
the trade names of “Rent-A-Center,” “ColorTyme,” and “RimTyme.” For
additional information about the Company, please visit its website
at www.rentacenter.com.
About Merchants Preferred
Merchants Preferred, founded in 2012 and based in Atlanta,
Georgia, is a nationwide provider of virtual rent-to-own services
for non-prime customers. Merchants Preferred’s advanced technology,
back office infrastructure and outstanding service enables
competitive customer and retailer value propositions. Additionally,
they are led by a highly experienced management team with
experience in the non-prime consumer space.
Forward Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties. Such forward-looking statements
generally can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "intend," "could,"
"estimate," "predict," "continue," "should," "anticipate,"
"believe," or “confident,” or the negative thereof or variations
thereon or similar terminology. The Company believes that the
expectations reflected in such forward-looking statements are
accurate. However, there can be no assurance that such expectations
will occur. Factors that could impact such expectations include,
but are not limited to: the Company's ability to realize the
strategic benefits from the acquisition of substantially all the
assets and assumption of certain liabilities of C/C Financial
Corp., a Delaware Corporation d/b/a Merchants Preferred ("Merchants
Preferred" and the acquisition thereof, the "Merchants Preferred
Acquisition"), including achieving expected growth rates, synergies
and operating efficiencies from the Company's acquisition; the
Company's ability to successfully integrate Merchants Preferred's
operations which may be more difficult, time-consuming or costly
than expected; operating costs, loss of retail partners and
business disruption arising from the Merchants Preferred
Acquisition; the ability to retain certain key employees at
Merchants Preferred; risks related to Merchants Preferred’s virtual
rent-to-own business; the Company's transition to more-readily
scalable, “cloud-based” solutions; the Company's ability to develop
and successfully implement digital or E-commerce capabilities,
including mobile applications; information technology and data
security costs; the impact of any breaches in data security or
other disturbances to the Company's information technology and
other networks and the Company's ability to protect the integrity
and security of individually identifiable data of its customers and
employees; the general strength of the economy and other economic
conditions affecting consumer preferences and spending; factors
affecting the disposable income available to the Company's current
and potential customers; changes in the unemployment rate; the
Company's ability to identify and successfully market products and
services that appeal to its customer demographic; consumer
preferences and perceptions of the Company's brand; the Company's
ability to enter into new and collect on its rental or lease
purchase agreements; the passage of legislation adversely affecting
the rent-to-own industry; litigation or administrative proceedings
to which the Company is or may be a party to from time to time; and
the other risks detailed from time to time in the Company's SEC
reports, including but not limited to, its Annual Report on Form
10-K for the year ended December 31, 2018, and its Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2019 and June
30, 2019.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190814005240/en/
Investors: Rent-A-Center, Inc. Maureen Short EVP,
Chief Financial Officer 972-801-1899
maureen.short@rentacenter.com
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