This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Lone Star inks $1.3B deal for DFC Global

NEW YORK (The Deal) -- DFC Global (DLLR) on Wednesday announced plans to sell itself to an affiliate of Lone Star Funds in a deal that with debt values the alternative lender at $1.3 billion.

Terms of the deal call for Lone Star Global Acquisitions Ltd. to pay $9.50 per share in cash for each share of Berwyn, Pa.-based DFC, a premium of about 5.8% to the target's Tuesday close. The deal values DFC equity at about $366.5 million.

DFC is a provider of unsecured consumer loans, secured pawn loans, check cashing, gold buying and other services in ten European and North American countries, operating from about 1,500 retail outlets with brands including Money Mart, The Money Shop, Insta-Cheques, MoneyNow! and ExpressCredit.

Company chairman and CEO Jeff Weiss in a statement said the deal "delivers immediate cash value to our stockholders" while providing DFC with a partner that can help it to expand.

"Lone Star Funds is a sophisticated investor with broad-based financial and retail expertise, and we look forward to taking advantage of enhanced financial flexibility to find new ways to build our business while continuing to meet and exceed the needs of our global customer base," Weiss said.

DFC has been the target of shareholder lawsuits accusing the company and some of its executives of misrepresenting information to investors. The company in November withdrew a $650 million senior unsecured notes offering and called off a cash tender for outstanding notes after a class action lawsuit was filed against it.

The West Palm Beach Police Pension Fund filed suit against the company and two executives in the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia alleging that the company engages in predatory lending with high fees to consumers that had no means to repay them and participated in other irresponsible lending practices.

The plaintiffs claimed DFC "misrepresented to investors that it complied with government regulations and guidance with regard to irresponsible lending practices, and that the company made 'prudent,' 'conservative,' and 'responsible' underwriting decisions when making loans."

DFC said it believes the "complaint is without merit" and said it intends "to defend against it vigorously."

More recently the company has come under pressure due to new regulatory guidelines for lending in the United Kingdom, as well as currency exchange issues. DFC on Wednesday reduced its guidance for fiscal 2014 Ebitda to between $151 million and $156 million, from $170 million to $200 million, and took down earnings per share estimates due to those issues and its tax rate.

DFC was advised on the sale by Houlihan Lokey Capital and Pepper Hamilton.

Lone Star received financial advice from Jefferies along with Credit Suisse Securities (USA), with Jefferies Finance and Credit Suisse  (CS) providing debt financing commitments for the acquisition and Gibson Dunn & Crutcher serving as legal counsel to the buyer.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,156.85 +24.88 0.15%
S&P 500 2,001.57 +2.59 0.13%
NASDAQ 4,562.1890 +9.43 0.21%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs