CURO Group Holdings Corp. Positioned to Benefit from Katapult’s Announced Merger with FinServ Acquisition Corp.
December 18 2020 - 9:25AM
Business Wire
$900+ million Transaction Provides $365 million
Total Consideration to CURO
CURO Group Holdings Corp. (NYSE: CURO) (“CURO”), a market leader
in providing credit to non-prime consumers, announced today that it
is positioned to benefit from today’s announcement that Katapult
Holding, Inc. (“Katapult”), a company approximately 40% owned by
CURO and a leading provider of e-commerce point-of-sale (“POS”)
lease purchase options for non-prime US consumers, and FinServ
Acquisition Corp. (Nasdaq: FSRV) (“FinServ”), a publicly traded
special purpose acquisition company (“SPAC”), have entered into a
definitive merger agreement. The transaction values Katapult’s
equity at $908 million, which includes an earnout of up to $75
million in the form of additional common shares in the new public
company.
Based on CURO’s ownership in Katapult, the transaction announced
today will provide consideration consisting of a combination of
cash and stock in the new company to CURO of $365 million, which
includes an earnout of up to $30 million in the form of additional
common shares in the new public company. To date, CURO has made a
total cash investment in Katapult of $27.5 million.
“We first began investing in Katapult in 2017 as we identified
multiple catalysts for future success–an innovative e-commerce POS
business model, a focus on the vast and underpenetrated non-prime
financing market and a clear and compelling value proposition for
merchants and consumers. We have enjoyed partnering with Katapult’s
experienced and talented management team and are proud of the
milestones they have achieved to make today’s announcement
possible,” said Don Gayhardt, President and Chief Executive Officer
of CURO and member of the Board of Directors of Katapult.
“Katapult’s CEO Orlando Zayas and the company’s management team are
first-rate and we believe that Katapult is well positioned to
continue to succeed as a public company with even greater access to
capital, an enhanced brand and an accelerated growth
trajectory.”
“This transaction is a clear win for CURO and its shareholders.
When closed, the transaction will increase our cash balances,
providing greater balance sheet flexibility for potential
opportunities including strategic M&A that will expand our
product offerings and market reach. Furthermore, we will retain a
meaningful equity stake in Katapult and have board representation
in the newly public company. This gives us the opportunity to
continue participating in the future direction of Katapult, as the
company advances its position as the leading e-commerce POS
financing platform focused on non-prime consumers,” Gayhardt
concluded.
Upon the closing of the transaction, CURO anticipates receiving
cash of up to $125 million and maintaining an ownership stake of at
least 21% of the fully-diluted shares of the new public company.
The final consideration mix between cash and stock will vary based
on SPAC investor redemptions and certain other adjustments. The
transaction is expected to close during the first half of 2021 and
remains subject to approval by FinServ stockholders and other
customary closing conditions. As detailed in the press release from
Katapult and FinServ, the Boards of Directors of both Katapult and
FinServ have unanimously approved the transaction.
More details on the transaction can be found in the press
release and investor presentation from Katapult and FinServ, which
are available in the “Investors” sections of the FinServ website at
https://finservacquisition.com and the Katapult website at
https://go.katapult.com/investor_relations, which CURO is providing
solely for informational purposes only.
A supplemental investor presentation providing more details on
the impact of the transaction to CURO is available in the “Events
& Presentations” section of CURO’s Investors website at
https://ir.curo.com/events-and-presentations.
Forward-Looking Statements
This press release contains forward-looking statements. These
forward-looking statements include statements regarding
projections, estimates and assumptions about the value of
Katapult’s equity; the impact of the transaction on CURO, including
the total consideration we expect to receive and the combination of
cash and stock and potential earnout; the expected uses of such
consideration and our expectations for increasing cash balances;
CURO’s ownership and participation in Katapult following closing of
the transaction; Katapult’s future success; and the expected timing
of the transaction. In addition, words such as “guidance,”
“estimate,” “anticipate,” “believe,” “forecast,” “step,” “plan,”
“predict,” “focused,” “project,” “is likely,” “expect,” “intend,”
“should,” “will,” “confident,” variations of such words and similar
expressions are intended to identify forward-looking statements.
The ability to achieve these forward-looking statements is based on
certain assumptions, judgments and other factors, both within and
outside of our control, that could cause actual results to differ
materially from those in the forward-looking statements, including:
the inability of the parties to successfully or timely consummate
the proposed transaction, including the risk that any required
regulatory approvals are not obtained, are delayed or are subject
to unanticipated conditions that could adversely affect the
combined company or the expected benefits of the proposed
transaction or that the approval of FinServ stockholders is not
obtained; failure to realize the anticipated benefits of the
proposed transaction; risks relating to the uncertainty of
projected financial information with respect to Katapult; the
effects of competition on Katapult’s future business; Katapult’s
ability to attract and retain customers; market, financial,
political and legal conditions; the impact of COVID-19 pandemic on
Katapult’s and our business and the global economy; risks related
to the concentration of Katapult’s business among a relatively
small number of merchants; the ability of FinServ or the combined
company to issue equity or equity-linked securities or obtain debt
financing in connection with the proposed transaction or in the
future; our dependence on third-party lenders to provide the cash
we need to fund our loans and our ability to affordably access
third-party financing; errors in our internal forecasts; our level
of indebtedness; our ability to integrate acquired businesses; our
dependence on third-party lenders to provide the cash we need to
fund our loans and our ability to affordably access third-party
financing; actions of regulators and the negative impact of those
actions on our business; our ability to protect our proprietary
technology and analytics and keep up with that of our competitors;
disruption of our information technology systems that adversely
affect our business operations; ineffective pricing of the credit
risk of our prospective or existing customers; inaccurate
information supplied by customers or third parties that could lead
to errors in judging customers’ qualifications to receive loans;
improper disclosure of customer personal data; failure of third
parties who provide products, services or support to us; any
failure of third-party lenders upon whom we rely to conduct
business in certain states; disruption to our relationships with
banks and other third-party electronic payment solutions providers;
disruption caused by employee or third-party theft and errors in
our stores as well as other factors discussed in our filings with
the Securities and Exchange Commission. These projections,
estimates and assumptions may prove to be inaccurate in the future.
These forward-looking statements are not guarantees of future
performance and involve known and unknown risks and uncertainties
that are difficult to predict with regard to timing, extent,
likelihood and degree of occurrence. There may be additional risks
that we presently do not know or that we currently believe are
immaterial that could also cause actual results to differ from
those contained in the forward-looking statements. Given these
risks and uncertainties, investors should not place undue reliance
on forward-looking statements as a prediction of actual future
results. We undertake no obligation to update, amend or clarify any
forward-looking statement for any reason.
About CURO
CURO Group Holdings Corp. (NYSE: CURO), operating in two
countries and powered by its fully integrated technology platform,
is a provider of credit to non-prime consumers. In 1997, the
Company was founded in Riverside, California by three Wichita,
Kansas childhood friends to meet the growing consumer need for
short-term loans. Their success led to opening stores across the
United States and expanding to offer online loans and financial
services across two countries. Today, CURO combines its market
expertise with a fully integrated technology platform, omni-channel
approach and advanced credit decisioning to provide an array of
credit products across all mediums. CURO operates under a number of
brands including Speedy Cash®, Rapid Cash®, Cash Money®,
LendDirect®, Avío Credit®, Opt+® and Revolve Finance®. With over 20
years of operating experience, CURO provides financial freedom to
non-prime consumers.
(CURO-NWS)
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version on businesswire.com: https://www.businesswire.com/news/home/20201218005409/en/
Investor Relations: Roger Dean Executive Vice President and
Chief Financial Officer Phone: 844-200-0342 Email: IR@curo.com Or
Financial Profiles, Inc. Curo@finprofiles.com
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