Pursuant to the Business Combination Agreement, the Issuer acquired American First Finance by effecting
(a) a holding company merger in accordance with Section 251(g) of the Delaware General Corporation Law whereby FirstCash merged with and into Merger Sub, with FirstCash surviving such merger as a direct wholly owned subsidiary of Issuer
(the New Parent Merger) and (b) immediately following the New Parent Merger, Issuer acquired all of the equity interests of American First Finance from AFF Services in exchange for a base purchase price consisting of 8,046,252 shares of Common Stock of the Issuer and $406 million in cash, subject to certain adjustments including a net debt adjustment, and the right (as further described below) to receive a
$25 million working capital payment payable at the end of 2022, and the right to receive up to an additional $300 million of consideration and $75 million of consideration, subject to the achievement by AFF of certain performance
metrics and the performance of the Companys common stock into the first quarter of 2022, respectively (collectively, the AFF Acquisition).
As described above, pursuant to the Business Combination Agreement, AFF Services has the right to receive up to an additional $300 million of
consideration pursuant to an earnout if American First Finance achieves certain adjusted EBITDA targets following the closing (the Earnout Consideration). In particular, the earnout provides AFF Services the right to receive up to
$250 million of additional consideration if American First Finance achieves certain adjusted EBITDA targets for the period consisting of the fourth quarter of 2021 through the end of 2022 and up to $50 million if American First Finance
achieves certain adjusted EBITDA targets for the first half of 2023. The Earnout Consideration is payable in cash or, at New Parents discretion and subject to obtaining any required stockholder approvals under the NASDAQ rules for such
issuance, in Common Stock of the Issuer.
As described above, the Business Combination Agreement also provides AFF Services with the right to receive up
to $75 million of additional consideration in the event that the highest average stock price of the Issuers Common Stock being issued to AFF Services pursuant to the Business Combination Agreement for any
10-day period from December 6, 2021 through February 28, 2023 (the Highest Average Stock Price) is less than $86.25 (the Reference Price), which is the price utilized in the
Business Combination Agreement to determine the value of the Stock Consideration (as defined in the Business Combination Agreement) payable at closing to AFF Services. In the event that the Highest Average Stock Price is less than the Reference
Price, then AFF Services shall be entitled to an amount equal to such difference multiplied by the number of shares issued to AFF Services as Stock Consideration, which is was equal to 8,046,252
shares, with such amount capped at $75 million. In addition, the Business Combination Agreement provides for a fixed $25 million working capital payment payable at the end of 2022.
The AFF Acquisition closed on December 17, 2021 (the Closing Date).
The foregoing description of the Business Combination Agreement does not purport to be complete and is qualified in its entirety by reference to the Business
Combination Agreement and that certain First Amendment to the Business Combination Agreement, dated as of December 6, 2021, by and among the parties thereto, which are filed as exhibits to this Schedule 13D and are incorporated by reference
herein.
Item 4.
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Purpose of Transaction
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The information set forth in Items 3 and 6 is incorporated by reference in its entirety into this Item 4.
Mr. Rippel serves as a member of the board of directors of the Issuer. As a result, the Reporting Persons may have influence over the corporate
activities of the Issuer, including activities that may relate to items described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
The
Reporting Persons hold the Common Stock of the Issuer for investment purposes. The Reporting Persons may, from time to time, purchase additional securities of the Issuer either in the open market or in privately-negotiated transactions, depending
upon the evaluation by the Reporting Persons of the Issuers business, prospects and financial condition, the market for such securities, other opportunities available to the Reporting Persons, general economic conditions, stock market
conditions and other factors. Depending upon the factors noted above, the Reporting Persons may also decide to hold or dispose of all or part of their investments in securities of the Issuer and/or enter into derivative transactions with
institutional counterparties with respect to the Issuers securities.
Except as described in this Schedule 13D, the Reporting Persons do not have
any present plans or proposals as of the date hereof that relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. However, the Reporting Persons reserve the right to formulate
in the future plans or proposals which may relate to or result in the transactions described in subparagraphs (a) through (j) of this Item 4.