Cash at close of $85 million; earn-out of
$36 million
– Flexiti, founded in 2013, is a leading provider of
point-of-sale (“POS”) consumer financing solutions in Canada with
the market-leading omni-channel FinTech platform
– Provides CURO instant capability and scale opportunity in
Canada’s credit card and POS financing markets
– Flexiti's omni-channel buy-now-pay-later (“BNPL”) solution is
available in nearly 6,000 retail locations and e-commerce sites
across Canada
– Enhances CURO’s long-term growth, financial and risk
profiles
CURO Group Holdings Corp. (NYSE: CURO) (“CURO”), a market leader
in providing credit to non-prime consumers, today announced it has
entered into an agreement to acquire Flexiti Financial Inc.
(“Flexiti”), an emerging growth Canadian POS/BNPL provider. Under
the terms of the agreement, CURO will acquire Flexiti for cash at
closing of $85 million. The transaction also includes contingent
consideration of up to $36 million based on the achievement of
risk-adjusted revenue and origination targets over the next two
years.
The acquisition of Flexiti further diversifies CURO’s revenue
mix by product and geography and accesses the full spectrum of
Canadian consumers by adding an established omni-channel private
label credit card platform and POS financing capabilities. Flexiti
primarily serves prime consumers and the combination presents
significant revenue and earnings growth opportunities by using
CURO’s expertise to expand Flexiti’s non-prime product offerings.
The transaction also provides the opportunity to leverage CURO’s
loan servicing experience to improve Flexiti’s profit margins. The
combination of CURO and Flexiti brings together two complementary
businesses with like-minded management teams to serve prime and
non-prime Canadian consumers directly or at the POS. In connection
with the transaction, Flexiti refinanced and expanded its
nonrecourse asset-backed warehouse financing facility from $296
million to $390 million.
Flexiti, one of Canada’s fastest growing companies, is a
privately-held POS lender headquartered in Toronto, offering
customers flexible payment plans at retailers that sell goods such
as furniture, appliances, jewelry and electronics. Flexiti is
experiencing strong growth with originations increasing from C$49
million in 2017 to over C$290 million in 2020. Through the
company’s award-winning BNPL platform and proprietary technology,
customers can be approved instantly to shop with their FlexitiCard,
which they can use online or in-store to make multiple purchases,
within their credit limit, without needing to reapply. In 2020,
Flexiti was recognized by The Globe and Mail (Canada’s Fastest
Growing Companies– ranked 6th), Canadian Business (Growth List –
ranked 3rd), Deloitte (Technology Fast 50 TM – ranked 6th) and The
Financial Times (The Americas’ Fastest Growing Companies – ranked
29th, 2nd in Canada).
“Flexiti is one of Canada’s fastest-growing BNPL providers with
a market-leading omni-channel FinTech platform. This acquisition
serves as an important milestone for CURO’s continued value
creation in Canada allowing the company to serve customers across
all channels and with an expanded product set,” said Don Gayhardt,
President and Chief Executive Officer of CURO. “CURO has been
focused on M&A opportunities that align with our key strategic
growth areas in Canada and cards, and this acquisition accelerates
our progress on both fronts. Beyond the compelling strategic
rationale and enhancements this transaction brings to our long-term
growth strategy, Flexiti is a strong cultural fit for CURO. Credit
risk management is a core competency for both companies that seek
to optimize the balance between growth and prudent credit risk
management to maximize long-term profitability. Both companies
structure their businesses around the value of the omni-channel
model, and continually enhance their product suites to best meet
the evolving needs of their customers. Flexiti’s management team
and technology are first-rate and the company is well-positioned to
execute on a strategic plan that calls for continued rapid
origination growth. I’m excited to welcome Flexiti to the CURO team
and look forward to creating value for all of our
stakeholders.”
Peter Kalen, founder and CEO of Flexiti, said, “Flexiti
continues to grow at a rapid rate and this transaction will enable
us to accelerate our growth trajectory. I am tremendously proud of
the success that Flexiti has achieved in its seven years of
operations and I have no doubt we are better positioned than ever
to provide great BNPL offerings to our retail partners and
cardholders. Through this acquisition, Flexiti will leverage CURO’s
financial strength, lending expertise and leadership across the
credit spectrum to strengthen Flexiti’s position as a leading
Canadian BNPL solution provider.”
Timing and Approvals
The transaction has been approved by the Board of Directors of
each company and is expected to close in the first quarter of 2021,
subject to customary Canadian regulatory approvals.
Advisors
Osler, Hoskin and Harcourt served as legal counsel to CURO in
this transaction. Houlihan Lokey served as financial advisor and
Norton Rose Fulbright Canada served as legal counsel to Flexiti in
this transaction.
Investor Call
CURO and Flexiti will hold a joint conference call to discuss
the transaction at 8:30 am ET today. The call will include a
discussion of the transaction followed by a question and answer
session with management from CURO and Flexiti.
Conference Call Information: The live webcast of the call
can be accessed at the CURO Investor Relations website at
http://ir.curo.com/. You may access the call at 1-866-807-9684
(1-412-317-5415 for international callers). Please ask to join the
CURO Group Holdings and Flexiti call.
A supplemental investor presentation providing more details on
Flexiti and the acquisition is available in the “Events &
Presentations” section of CURO’s Investors website at
https://ir.curo.com/events-and-presentations.
Archive: A taped replay of this call will be available
until February 8, 2021. Eastern Time. You may access the conference
call replay at 1-877-344-7529 (1-412-317-0088 for international
callers). The replay access code is 10152172. An archived version
of the webcast will be available on the CURO Investors website for
90 days.
Forward-Looking Statements
This press release contains forward-looking statements. These
forward-looking statements include statements regarding
projections, estimates and assumptions about the impact of the
transaction on us, including our belief that the acquisition
enhances long-term growth and financial and risk profiles, further
diversifies our revenue mix and creates value for our stakeholders;
the revenue, earnings and origination growth opportunities and
improved profit margins for Flexiti following combination;
Flexiti’s projected 2020 originations; and the expected timing of
the acquisition. 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; failure to realize the anticipated benefits of the
proposed transaction; risks relating to the uncertainty of
projected financial information; the effects of competition on the
combined company’s future business; our ability to attract and
retain customers; market, financial, political and legal
conditions; the impact of COVID-19 pandemic on the combined
company’s business and the global economy; 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; 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 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.
About Flexiti
Flexiti is one of Canada's fastest-growing point-of-sale
lenders, offering customers 0% interest financing at retailers that
sell big-ticket goods like furniture, appliances, jewelry and
electronics. Through its award-winning buy-now-pay-later platform,
customers can be approved instantly to shop with their FlexitiCard,
which they can use online or in-store to make multiple purchases,
within their credit limit, without needing to reapply. Accepted at
nearly 6,000 locations and ecommerce sites across Canada including
The Brick, Leon's, Staples, Sleep Country, Wayfair, Birks and
Peoples Jewellers, Flexiti aims to make our customers' lives more
affordable and help our retail partners grow their sales by
offering flexible financing options.
Flexiti's technology platform is recognized as market leading,
winning ACT (Advanced Card Technologies) Canada's 2015 Technology
Innovation Award for Payments Benefiting Merchants. In 2017,
Flexiti was recognized in North America as the Leading Emerging
Fintech by LendIt. In 2019, Flexiti was named Canada's 11th fastest
growing company by The Globe and Mail, ranked 7th in the Deloitte
Technology Fast 50TM program, and 40th in Deloitte North America
Technology Fast 500TM. In 2020, Flexiti ranked 29th in The
Americas' 500 Fastest Growing Companies by the Financial Times, 6th
in The Globe and Mail’s Canada’s Top Growing Companies, 3rd on the
2020 Growth List and 6th and 39th on Deloitte Technology Fast 50TM
and Fast 500TM, respectively.
For more information, visit www.flexiti.com.
(CURO-NWS)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210201005253/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
CURO (NYSE:CURO)
Historical Stock Chart
From Apr 2024 to May 2024
CURO (NYSE:CURO)
Historical Stock Chart
From May 2023 to May 2024