First Cash Financial Services buys 56 pawn stores
Rick Wessel, chief executive officer of First Cash, stated, "We are pleased to announce multiple pawn store acquisitions in several of our core markets, including Mexico, Colorado and Texas.
"The acquired full-service retail pawn locations should further strengthen our significant presence in these markets and expand our platform to support long-term earnings growth. Including these acquisitions, the Company now operates over 980 stores in 28 states in Mexico and 12 states in the U.S."
"We are particularly excited about the 47 stores acquired in Mexico, all of which are full-service locations. We believe the acquired operation has the potential for long-term revenue and earnings accretion as the stores become integrated and more mature.
"Including this acquisition, we anticipate adding a total of 85 to 90 stores in Mexico in 2014, significantly exceeding our original 2014 store opening target in Mexico of 65 to 70 stores. We will focus on integrating the 47 acquired stores over the next several months, and accordingly, will slow the pace of planned de novo store openings during the fourth quarter of 2014."
The announced U.S. pawn acquisitions include a five-store Colorado chain and a four-store chain located in Texas. First Cash intends to consolidate two of the acquired Colorado stores with existing locations, resulting in a net addition of three stores and giving the Company a total of 32 locations in Colorado. With the four-store acquisition in Texas, the Company will have a total of 148 pawn locations in the state.
The total combined purchase price for the three acquisitions is approximately $28.5 million, net of cash acquired and subject to certain working capital adjustments.
The acquired assets from the acquisitions included approximately $7.5 million in pawn loans outstanding and $7 million of merchandise inventory as of August 26, 2014 (unaudited). Including the impact of transaction and integration expenses, the Company expects nominal earnings accretion from these acquisitions in 2014. ■