ACE Cash Express Expands Store Network; Agrees to Acquire 111 Stores From Popular, Inc.
September 21 2005 - 5:05PM
PR Newswire (US)
DALLAS, Sept. 21 /PRNewswire-FirstCall/ -- ACE Cash Express, Inc.
(NASDAQ:AACE) today announced execution of an asset purchase
agreement to acquire 111 stores owned and operated by Popular Cash
Express, a subsidiary of Popular, Inc. (NASDAQ:BPOP), for $36
million. ACE also expects to invest approximately $5.0 million
during the next 24 months on capital improvements to the acquired
locations. The acquisition is expected to be completed by the end
of the second quarter of fiscal 2006 and is subject to the
satisfaction of various customary conditions, including consent of
the seller's landlords, receipt of requisite licenses and permits
and consent from ACE's bank group. The Popular Cash Express stores
being acquired offer check cashing, money order, wire transfer and
bill pay services and are located in 4 states, including 71 stores
in Southern California, 17 stores in Arizona, 14 stores in Florida
and 9 stores in Texas. The Popular Cash Express stores do not
currently offer short-term consumer loans, but ACE plans to
introduce this product in approximately 95 of the acquired stores.
"The addition of the Popular Cash Express stores, and more
importantly their people, is an opportunity to strengthen our
presence in several key markets and leverage our existing
infrastructure. Consistent with our growth plans, we will continue
to combine new store openings with opportunistic acquisitions like
Popular Cash Express. We welcome their customers and employees to
the ACE network of over 1,370 stores," stated Jay B. Shipowitz,
President and Chief Executive Officer of ACE. Financing for the
acquisition includes up to $22.5 million in the form of a 3.625%
convertible note issued to the seller, and the remainder in cash.
The conversion price and the allocation between the note and cash
components will be determined based on the average trading price of
ACE's common stock for the 30 days preceding the initial closing.
ACE intends to stage multiple closings during its fiscal second
quarter as the conditions to closing at each acquired store are
satisfied. "We expect the acquisition of these 111 stores to be
between $0.26 and $0.30 accretive to earnings during the 12 months
following the closing of the acquisition of all stores. This
expected range includes approximately $1.0 million of transition
costs expected to be expensed in the second quarter of fiscal
2006," stated William S. McCalmont, Executive Vice President and
Chief Financial Officer of ACE. "We believe strongly in the
potential of this business to serve well the large and growing low
and moderate income segments of the population," said Roberto R.
Herencia, President of Banco Popular North America. "This
transaction will allow us to hold an investment in the largest
publicly traded player in the retail check cashing business. We
remain committed to the industry as lender and servicer, and will
do so now without being a direct competitor." Conference Call An
investor conference call will be held today, Wednesday, September
21 at 5:00 p.m. E.D.T., regarding the purchase of 111 stores from
Popular Cash Express and first quarter guidance. To participate in
the conference dial (800) 442-9701. The confirmation code is
9762624. Jay B. Shipowitz, President and Chief Executive Officer
and William S. McCalmont, Executive Vice President and Chief
Financial Officer will conduct the conference. About ACE Cash
Express ACE Cash Express, Inc. is a leading retailer of financial
services, including check cashing, short-term consumer loans and
bill payment services, and the largest owner, operator and
franchisor of check cashing stores in the United States. As of June
30, 2005, ACE had a network of 1,371 stores in 37 states and the
District of Columbia, consisting of 1,142 company-owned stores and
229 franchised stores. ACE focuses on serving consumers, many of
whom seek alternatives to traditional banking relationships in
order to gain convenient and immediate access to check cashing
services and short-term consumer loans. ACE's website is found at
http://www.acecashexpress.com/ . Forward-Looking Statements This
release contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements are generally identified by the use of words such
as "expect," "anticipate," "estimate," "believe," "intend," "plan,"
"target," "goal," "should," "would," and terms with similar
meanings. Although ACE believes that the current views and
expectations reflected in these forward-looking statements are
reasonable, these views and expectations, and the related
statements, are inherently subject to risks, uncertainties, and
other factors, many of which are not under ACE's control and may
not even be predictable. Any inaccuracy in the assumptions, as well
as those risks, uncertainties and other factors could cause the
actual results to differ materially from these in the
forward-looking statements. These risks, uncertainties, and factors
include, but are not limited to, satisfaction of the various
conditions to the closing of the acquisition of the Popular Cash
Express stores, as well as, matters described in ACE's reports
filed with the Securities and Exchange Commission, such as: * ACE's
relationships with Republic Bank & Trust Company, First Bank of
Delaware, Travelers Express and its affiliates, and its bank
lenders; * ACE's relationships with providers of services or
products offered by ACE or property used in its operations; *
federal and state governmental regulation of check cashing,
short-term consumer lending and related financial services
businesses; * any impact to ACE's earnings derived from the loans
offered by each of Republic Bank & Trust Company and First Bank
of Delaware at ACE's stores in Texas, Pennsylvania and Arkansas
arising from the implementation of the revised Guidelines for
Payday Lending announced on March 1, 2005 by the Federal Deposit
Insurance Corporation, which revised Guidelines provide guidance to
banks that engage in payday lending, and include a requirement that
such banks develop procedures to ensure that a payday loan is not
provided to any customer with payday loans outstanding from any
lender for more than 3 months in the previous 12 months; * any
litigation; * theft and employee errors; * the availability of
adequate financing, suitable locations, acquisition opportunities
and experienced management employees to implement ACE's growth
strategy; * increases in interest rates, which would increase ACE's
borrowing costs; * the fragmentation of the check cashing industry
and competition from various other sources, such as banks, savings
and loans, short-term consumer lenders, and other similar financial
services entities, as well as retail businesses that offer services
offered by ACE; * the terms and performance of third-party services
offered at ACE's stores; and * customer demand and response to
services offered at ACE's stores. ACE expressly disclaims any
obligation to update or revise any of these forward-looking
statements, whether because of future events, new information, a
change in ACE's views or expectations, or otherwise. ACE makes no
prediction or statement about the performance of its common stock.
DATASOURCE: ACE Cash Express, Inc. CONTACT: William S. McCalmont,
Executive Vice President & CFO, +1-972-753-2314, or , or
Douglas Lindsay, Vice President of Finance, +1-972-753-2342, or ,
both of ACE Cash Express, Inc. Web site:
http://www.acecashexpress.com/
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