Endorses Cash Converters International Growth Initiatives
The Company also made an additional investment in Cash Converters International Limited to fund growth. Cash Converters has stated that the new funds will be used to acquire stores within its franchised network, to open new corporate-owned stores and to finance the growth of the Australian and U.K. personal loan books.
EZCORP acquired an additional 12,430,000 ordinary shares at AUS $0.85 per share. This acquisition was part of a share placement by Cash Converters of 38.5 million shares, and preserves EZCORP's ownership percentage at approximately 33%.
Cash Converters previously announced that its unaudited earnings before interest and taxes (EBIT) for the first quarter of fiscal 2013 (ended September 30, 2012) increased 43% compared to the first quarter of fiscal 2012. Cash Converters operates a global network of almost 700 company-owned and franchised stores in Australia, U.K. and 15 other countries primarily in Europe and Asia.Mr. Rothamel stated, "We are excited to support Cash Converters' growth initiatives as part of our Change Capital portfolio. Cash Converters is the buy/sell global leader with a proven platform that we use in Canada and the U.S. We continue to believe that buy/sell models, such as those offered by Cash Converters and TUYO in Mexico, represent an important alternative channel for our target customers and a meaningful opportunity for growth and diversification. The Cash Converters team is highly skilled in developing innovative new consumer loan products, and we continue to explore opportunities to partner with them." Cash Converters has grown substantially while associated with EZCORP. EZCORP acquired its initial investment in Cash Converters in 2009 and 2010 for $57.8 million. At September 30, 2012, that investment was valued at $100.7 million. Enters the High Potential Arizona Market EZCORP has also completed the acquisition of 12 USA Pawn & Jewelry stores in Tucson and Bullhead City, Arizona. This investment marks the Company's initial move into Arizona and its key markets. The Company intends to grow its presence over time into a market-leading provider of instant cash, by expanding its storefront position, supported by both online and mobile channels. USA Pawn & Jewelry represents the second set of stores that the Company has purchased from owner Craig McCall, who continues to consult with and assist the Company in executing its multi-market growth strategy. Mr. Rothamel stated, "The Arizona acquisition demonstrates our continued focus on growing and expanding our core pawn business. Not only will the addition of these 12 successful stores enhance our profitability in the near-term, it will also provide us with a robust base from which to expand further, through in-fill opportunities and possible additional acquisitions. Craig is an extremely talented pawn entrepreneur and operator, and we look forward to continuing our relationship to develop further growth opportunities. Additional CEO Commentary Paul E. Rothamel concluded, "These three investments further evidence our desire to use capital to build a company that better meets the diverse needs of our customers. They continue our highly successful and disciplined growth strategy and will provide additional sources for earnings and shareholder value growth."