AUSTIN, Texas, Dec. 20, 2012 /PRNewswire/ -- EZCORP, Inc.
(NASDAQ: EZPW) has completed three investments that further expand
its capacity to provide customers with instant cash solutions where
they want, when they want and how they want. These
investments enlarge the Company's global distribution network, add
or enhance delivery channels and bring highly skilled, innovative
talent to organization. The Company today announced today the
following developments:
- It has closed the previously announced acquisition of U.S.
online lender Go Cash;
- It has increased its investment in Cash Converters
International Limited; and
- It has begun expansion in the Arizona market through the 12-store
acquisition of USA Pawn &
Jewelry.
(Logo:
http://photos.prnewswire.com/prnh/20090713/EZCORPLOGO)
Jump Starts Online Lending Business
EZCORP today completed the previously announced purchase of Go
Cash, a U.S. based online lender. James R. Carnes, the founder and president of Go
Cash and an industry leader, has joined EZCORP as President, Online
Services. He will lead a management group with significant
experience in online lending; an internal decision science
analytics team to support stores, channels and products, both
domestically and internationally; and experienced customer service
and collections call center staff.
The performance-based purchase price consists of an initial
payment of $27 million (which was
paid at the closing) and guaranteed supplemental payments of
$11 million at the end of the first
year and $6 million at the end of
each of the second and third years. The performance element
will be based on the net income generated by the business. At
the end of each of the first four years following the closing,
EZCORP will make a contingent supplemental payment equal to six
times net income (subject to certain adjustments), minus all
consideration payments previously paid.
For the $27 million closing
payment, EZCORP issued 1,400,198 shares of its Class A Non-Voting
Common Stock valued at $19.283 per
share, the average closing sales price for the preceding ten
trading days.
Paul E. Rothamel, EZCORP's
President and Chief Executive Officer, stated: "The Go Cash
acquisition supports our multi-channel and product strategy, and
provides us with the capability to quickly build a significant
online presence with a seasoned management team, proven
underwriting models and a sizable list of potential
customers. We also plan to leverage the Go Cash platform to
provide innovative loan products that allow customers to better
interact with us when and how they want — whether it be online, in
stores or a combination."
The Online Services business unit will be managed by Change
Capital, the EZCORP division that leads and manages EZCORP's
strategic investment program. Change Capital's mission within
EZCORP is to add markets, channels, products and talent, and to
identify synergies and implement global best practices throughout
all EZCORP business units and affiliates. Its portfolio of
businesses currently includes Albemarle & Bond Holdings PLC
(ABM.L), Cash Converters International Limited (CCV.ASX),
Crediamigo, TUYO and Cash Genie.
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."
About EZCORP
EZCORP is a leading provider of instant cash solutions for
consumers employing approximately 7,200 teammates and operating
over 1,275 Company-operated pawn, buy/sell and personal financial
services locations in the U.S., Mexico and Canada. We provide a variety of instant
cash solutions, including pawn loans, consumer loans and fee-based
credit services to customers seeking loans. At our pawn and
buy/sell stores, we also sell merchandise, primarily collateral
forfeited from pawn lending operations and used merchandise
purchased from customers.
EZCORP owns controlling interests in Prestaciones Finmart,
S.A.P.I. de C.V., SOFOM, E.N.R. (doing business under the name
"Crediamigo"), a leading provider of payroll deduction loans in
Mexico; in Artiste Holding Limited
(doing business under the name "Cash Genie"), a leading provider of
online loans in the U.K.; and in Renueva Commercial, S.A.P.I. de
C.V., an operator of buy/sell stores in Mexico under the name "TUYO." The
Company also has significant investments in Albemarle &
Bond Holdings PLC (ABM.L), one of the U.K.'s largest pawnbroking
businesses with over 180 full-line stores offering pawnbroking,
jewelry retailing, gold buying and financial services; and in Cash
Converters International Limited (CCV.ASX), which franchises and
operates a worldwide network of almost 700 stores that provide
personal financial services and sell pre-owned merchandise.
Special Note Regarding Forward-Looking Statements
This announcement contains certain forward-looking statements
regarding the Company's expected operating and financial
performance for future periods. Actual results for future
periods may differ materially from those expressed or implied by
these forward-looking statements due to a number of uncertainties
and other factors, including changes in the regulatory environment,
changing market conditions in the overall economy and the industry,
and consumer demand for the Company's products and services.
For a discussion of these and other factors affecting the
Company's business and prospects, see the Company's annual,
quarterly and other reports filed with the Securities and Exchange
Commission.
EZCORP Investor Relations
(512) 314-2220
Investor_Relations@ezcorp.com
www.ezcorp.com
SOURCE EZCORP, Inc.
