FirstCash, Inc. (the “Company”) (Nasdaq: FCFS), the leading
international operator of over 2,800 retail pawn stores in the U.S.
and Latin America, today announced that it has amended its
previously announced definitive agreement to acquire American First
Finance Inc. (“AFF”).
The total consideration payable to the seller at closing remains
unchanged, consisting of approximately 8.05 million shares of
common stock and $406 million in cash, subject to a net debt
adjustment. The transaction is now valued at approximately $916
million, based on the Company’s closing stock price on December 3,
2021, compared to the estimated valuation at the time of
announcement of $1.17 billion. As previously announced, there is
also $300 million of additional consideration payable in the event
AFF achieves certain performance targets through the first half of
2023.
Given recent volatility in FirstCash’s stock price, the
amendment provides for additional contingent consideration of up to
$75 million, to be based on the Company’s stock performance through
February 28, 2023. If the Company’s highest average stock price for
any 10-day period before that date is at or more than $86.25 per
share, then no such contingent consideration would be due. Given
the continued strength in AFF’s originations activity, which has
resulted in additional funding requirements since the entry into
the definitive agreement, the amendment also provides for a fixed
$25 million working capital payment payable December 31, 2022.
Rick Wessel, FirstCash Chief Executive Officer and Vice-Chairman
of the Board stated, “Since announcing our transaction with AFF
over a month ago, both businesses continue to perform strongly. The
financial and strategic merits of the transaction remain clear. In
light of the recent volatility in our stock price, we believe that
amending the transaction and proceeding with it is in the best
interests of our shareholders, customers and employees. We look
forward to working with the AFF team to complete the transaction
and capture the significant opportunities ahead to drive growth and
create long-term shareholder value.”
Doug Rippel, Chairman and Founder of American First Finance
stated, “With these amendments to the transaction, we are
moving forward with an exciting combination that will enable us to
grow our business as we provide retail financing alternatives to
underserved customers. I am confident about the tremendous
opportunities ahead for our combined companies to drive significant
value for all of our stakeholders.”
The Company has obtained the necessary antitrust approval and
expects to receive all other required regulatory approvals for the
transaction in the coming weeks and expects to close the
transaction by the end of the year, subject to the satisfaction of
the remaining customary closing conditions.
About FirstCash
FirstCash is the leading international operator of pawn stores
with over 2,800 retail pawn locations and 16,000 employees in 25
U.S. states, the District of Columbia and four countries in Latin
America including Mexico, Guatemala, Colombia and El Salvador.
FirstCash focuses on serving cash and credit constrained consumers
through its retail pawn locations, which buy and sell a wide
variety of jewelry, electronics, tools, appliances, sporting goods,
musical instruments and other merchandise, and make small consumer
pawn loans secured by pledged personal property.
FirstCash is a component company in both the Standard &
Poor’s MidCap 400 Index® and the Russell 2000 Index®. FirstCash’s
common stock (ticker symbol “FCFS”) is traded on the Nasdaq, the
creator of the world’s first electronic stock market. For
additional information regarding FirstCash and the services it
provides, visit FirstCash’s website located at
http://www.firstcash.com.
About American First Finance
American First Finance (“AFF”) is a leading technology-driven
point-of-sale payments platform focused on serving credit
constrained consumers. Founded in 2013, AFF established itself as
an innovative retail finance provider with differentiated products
that offer consumers payment flexibility across marketplaces.
Today, AFF’s payment solutions are available across 26 verticals
with providers of both consumer goods and services using either
AFF’s lease-to-own solution, a merchant-based retail installment
sales agreement, or a bank-issued loan. As one of the four largest
true omni-channel providers of “no credit required” payment
options, AFF supports a nationwide network of more than 6,500
active merchant partners with seamless experiences in-store,
online, in-cart and on mobile devices. The company has established
significant presence generating more than $1.9 billion in
originations and sales for its merchant partners since inception.
The company serves local, regional, and national merchants in
furniture, appliances, electronics, automotive repair, tire &
wheel, wireless, jewelry, cosmetic, and dental, among other
verticals.
For additional information regarding AFF and the services it
provides, visit AFF’s website located
at http://www.americanfirstfinance.com.
Cautionary Statement Regarding Forward-Looking
Statements
This release contains “forward-looking statements” (as defined
in the Private Securities Litigation Reform Act of 1995) regarding,
among other things, the acquisition by FirstCash of AFF and future
events or the future financial performance of FirstCash and AFF.
Words such as “anticipate,” “expect,” “project,” “intend,”
“believe,” “will,” “estimates,” “may,” “could,” “should” and words
and terms of similar substance used in connection with any
discussion of future plans, actions or events identify
forward-looking statements. The closing of the acquisition is
subject to regulatory approvals and other customary closing
conditions. There is no assurance that such conditions will be met
or that the acquisition will be consummated within the expected
time frame, or at all.
Forward-looking statements relating to the acquisition include,
but are not limited to: statements about the benefits of the
acquisition, including anticipated growth of AFF’s business,
certain synergies and future financial and operating results;
potential financing for the acquisition; FirstCash’s plans,
objectives, expectations, projections and intentions; the expected
timing of completion of the acquisition; and other statements
relating to the transaction that are not historical facts.
Forward-looking statements are based on information currently
available to FirstCash and involve estimates, expectations and
projections. Investors are cautioned that all such forward-looking
statements are subject to risks and uncertainties, and important
factors could cause actual events or results to differ materially
from those indicated by such forward-looking statements. With
respect to the proposed acquisition, these risks, uncertainties and
factors include, but are not limited to: the effect that any
adverse outcomes with respect to the CFPB’s lawsuit against
FirstCash may have on the combined company’s business, financial
condition and results of operations, which effect could be material
and include the payment of substantial monetary damages, the risk
that FirstCash or AFF may be unable to obtain the remaining
regulatory approvals required for the transaction; the risk that
FirstCash may not be able to finance the acquisition on favorable
terms, if at all; the length of time necessary to consummate the
acquisition, which may be longer than anticipated for various
reasons; the risk that AFF will not be integrated successfully; the
risk that the cost savings, synergies and growth from the
acquisition may not be fully realized or may take longer to realize
than expected; the diversion of management time on
transaction-related issues; and the risk that costs associated with
the integration of the businesses are higher than anticipated;
risks related to Mr. Rippel’s and his Affiliates future ownership
of approximately 16.6% of New Parent’s outstanding stock after
closing and the impact of future sales of such stock by Rippel
following the closing.
Furthermore, if the acquisition is consummated, FirstCash will
be subject to additional risks and uncertainties resulting from its
ownership of AFF, including, but not limited to: inherent risks
resulting from FirstCash’s entry into the line of businesses
currently conducted by AFF; risks related to the extensive
regulatory regimes that the AFF business is subject to and the
heightened effect of future regulatory or legislative actions,
including at the state level, on AFF and the effect of compliance
with enforcement actions, orders or agreements issued by applicable
regulators; risks related to AFF’s underwriting practices, loan
loss provision and the fact that AFF could experience credit losses
significantly higher than historic losses or its loan loss
provision; increased competition from other entities offering “buy
now, pay later” products, including larger financial institutions,
retailers, internet-based lenders and other entities offering
similar financial services as AFF; decrease in demand for AFF’s
products and services due to changes in the general economic
environment, or social or political conditions; the potential
impact of the announcement or consummation of the acquisition on
relationships with merchants, AFF’s bank partner, management team
and other employees; risk related to the ongoing COVID-19 pandemic,
including government responses thereto such as stimulus programs
which could impact demand for AFF’s products; risks related to
supply chain disruptions impacting the merchants with which AFF
does business and the impact that such disruptions could have on
the demand for AFF’s products; risks related to any current or
future litigation proceedings; the ability to attract new customers
and merchants and retain existing customers and merchants in the
manner anticipated; risks related to AFF’s merchant concentration;
the ability to hire and retain key personnel; reliance on existing
information technology systems; ability to protect intellectual
property rights; impact of security breaches, cyber-attacks or
fraudulent activity on AFF’s operations and reputations; the risks
associated with assumptions the parties make in connection with the
parties’ critical accounting estimates and legal proceedings; and
the potential of economic downturn or effects of tax assessments or
tax positions taken, risks related to goodwill and other intangible
asset impairment, tax adjustments, anticipated tax rates, or other
regulatory compliance costs.
Additional information concerning other risk factors is also
contained in FirstCash’s most recently filed Annual Reports on Form
10-K, subsequent Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K, and other Securities and Exchange Commission (“SEC”)
filings.
Many of these risks, uncertainties and assumptions are beyond
FirstCash’s ability to control or predict. Because of these risks,
uncertainties and assumptions, you should not place undue reliance
on these forward-looking statements. Furthermore, forward-looking
statements speak only as of the information currently available to
the parties on the date they are made, and FirstCash does not
undertakes any obligation to update publicly or revise any
forward-looking statements to reflect events or circumstances that
may arise after the date of this communication. FirstCash does not
give any assurance (1) that either FirstCash or AFF will achieve
its expectations, or (2) concerning any result or the timing
thereof. All subsequent written and oral forward-looking statements
concerning FirstCash, AFF, the acquisition or other matters and
attributable to FirstCash, AFF or any person acting on their behalf
are expressly qualified in their entirety by the cautionary
statements above.
Contacts for FirstCash
Gar JacksonGlobal IR GroupPhone: (817) 886-6998Email:
gar@globalirgroup.com
Doug Orr, Executive Vice President and Chief Financial
OfficerPhone: (817) 258-2650Email:
investorrelations@firstcash.comWebsite: investors.firstcash.com
Aaron Palash or Kara SperryJoele Frank, Wilkinson Brimmer
Katcher212-355-4449
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