Cash America International, Inc. (NYSE: CSH) announced today that it has signed an asset purchase agreement for the acquisition of substantially all of the assets of a chain of 34 pawn lending locations. When completed, the transaction will add 31 pawn lending locations in Georgia and 3 locations in North Carolina, which will expand Cash America’s presence in both markets. The stores are currently owned by PawnMart, Inc. and operate primarily under the PawnMart brand in both markets.
Commenting on the acquisition, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, “We are excited to add another established chain of pawn lending locations to the Cash America family in two markets that we believe have excellent long term prospects. Adding this well run group of pawn stores and talented team will enhance our pawn business for many years to come.”
The 31 stores in Georgia operate primarily in and around Atlanta where Cash America currently operates 17 pawn lending locations, which will give the Company 48 locations in this significant metropolitan area after closing the transaction. In addition, the Company will add 3 stores in Charlotte, North Carolina to its existing group of 16 pawn lending locations in North Carolina. The 34 pawn lending locations had approximately $10.7 million in pawn loan balances as of December 31, 2012 (unaudited).
Cash America expects the aggregate purchase price of the PawnMart locations to be approximately $62 million (including consideration for certain non-competition covenants), which will be paid in cash and funded by available cash and through the Company’s line of credit. The purchase price may be adjusted based on the aggregate value of the pawn loan balance and the merchandise inventory balance held by the seller at closing. The closing of the transaction is subject to the satisfaction of certain closing conditions, such as the receipt of certain approvals to be obtained by the seller and its parent company, Xponential, Inc., licensing and the receipt of certain regulatory approvals. If all closing conditions are satisfied, the closing of the acquisition is expected to occur in the fourth quarter of 2013. This acquisition is expected to be accretive to earnings immediately following its closing.