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8-K - FORM 8-K - DFC GLOBAL CORP. | w80762e8vk.htm |
EX-10.1 - EX-10.1 - DFC GLOBAL CORP. | w80762exv10w1.htm |
Exhibit 99.1
Dollar Financial Corp Announces Expected Acquisition of the Leading Pawn
Lending Business in Scandinavia; Company to Acquire 28 Pawn Stores in Sweden
and Finland
BERWYN, Pa., Dec 02, 2010 (BUSINESS WIRE)
Dollar Financial Corp (NASDAQ:DLLR News), a leading international diversified
financial services company serving primarily unbanked and under-banked
consumers for over 30 years, today announced that its wholly owned U.K.
subsidiary, Dollar Financial U.K. Ltd., has entered into an agreement to
acquire Sefina Finance AB, a leading Scandinavian pawn lending business with
headquarters in Stockholm, Sweden. Sefina, which has more than a 125 year
operating history, is the market leader in the region providing pawn loans
primarily secured by gold jewelry, diamonds and watches, through its 16 store
locations in Sweden and 12 stores in Finland. The completion of the acquisition
is contingent upon customary closing conditions, including local regulatory
approval, which is expected to take 30 to 60 days to obtain.
Commenting on the acquisition, Jeff Weiss, the Companys Chairman and Chief
Executive Officer, stated, This acquisition represents the continued execution
of our geographic and product diversification strategy, and extends and expands
our pawn lending business into Sweden and Finland, two markets which have
long-standing and highly developed regulations for the pawn lending industry.
Secured pawn lending, which is a widely accepted vehicle for providing loans to
the ever increasing numbers of unbanked and under-banked consumers around the
world, continues to be a rapidly growing segment of our diversified global
enterprise. We are excited to welcome the Sefina management team into the
Dollar Financial family and look forward to leveraging their expertise in the
future expansion of our global pawn operations within Scandinavia and other
countries as well. In concert with our recent acquisitions of the Suttons and
Robertsons and Robert Biggar pawn store chains in England and Scotland, and
the significant growth of the pawn lending business in our more than 350
company-operated stores across the United Kingdom, the acquisition of Sefina
and its significant pawn pledge book is an important step towards achieving the
Companys strategy to be the leading secured pawn lender in Europe.
Jeff Weiss continued, From everything I hear and read in the news, there
appears to be a significant on-going shift within the more developed economies
of the world towards service sector employment and lower paying jobs, as
manufacturing and some other higher paying occupations are off-shored to
developing countries where labor is less expensive. As a result, the average
wage rate for what we call the ALICE (Asset Limited Income Constrained)
demographic is shrinking against the rising tide of higher costs for food,
gasoline, health care and other basic necessities. In such an economy, where
the margin between personal income and the cost of living is continually
narrowing, pawn shops can provide a real benefit for consumers and small
business owners who may be confronted from time-to-time by an unexpected auto
repair bill or medical expense, or the need to replace broken or obsolete
equipment in order to keep their small businesses operating. Furthermore, since
pawn loans are provided on the basis of a secured asset as opposed to
employment or future earnings, demand for pawn loans tends to be strong in both
growing and weak economies and particularly robust during times of higher
unemployment. In addition, since pawn loans are often a less expensive option
for borrowing money for a short period of time, I would expect the demand for
such loans as a practical alternative for accessing cash quickly will continue
to increase. As such, the expansion of our pawn lending business globally is a
key element of the Companys long-term growth strategy and is in keeping with
our focus on the ever expanding ALICE demographic, and specifically the
customer segment we call ALICE secured or ALICE-S.
The cash consideration for the acquisition would be approximately $73.0
million, of which approximately $58.0 million would be cash paid at closing,
with the remaining $15.0 million of additional cash to be paid in installments
during calendar year 2011. The Company also expects to assume Sefinas existing
working capital lines of credit associated with a number of Scandinavian banks,
which are expected to have outstanding balances aggregating to approximately
$60.0 million upon the closing of the acquisition, are secured by the value of
Sefinas pawn pledge stock, and have average interest rates of approximately
4%. The Company will also be required to make additional cash payments to the
sellers over the next two years based on the financial performance of the
acquired business. The trailing twelve months EBITDA for the acquired stores is
expected to be approximately $14.0 million at closing. The Company anticipates
the acquisition will be immediately accretive to earnings, and expects to
update its earnings outlook for fiscal 2011 to include the Sefina business, net
of acquisition and transition costs, after the transaction is finalized.
About Dollar Financial Corp
Dollar Financial Corp is a leading international diversified financial services
company primarily serving unbanked and under-banked consumers and small
business owners for over 30 years. Through its retail storefront locations as
well as by other means, such as via the Internet, the Company provides a range
of consumer financial products and services in five countries (Canada, the
United Kingdom, the United States, the Republic of Ireland and Poland) to
consumers who, for reasons of convenience and accessibility, purchase some or
all of their financial services from the Company rather than from banks and
other financial institutions. The Companys products, principally its
short-term consumer loans, check cashing services, secured pawn loans and gold
buying services, provide customers with immediate access to cash for living
expenses or other episodic needs. The Company also offers high-value ancillary
services, including Western Union money order and money transfer products,
electronic tax filing, reloadable VISA(R) and MasterCard(R) debit cards,
foreign currency
exchange, and other services. In addition, through its branded
Military Installment Loan and Education Services, or MILES(R) program, the
Company provides fee based services to enlisted military personnel applying for
loans to purchase new and used vehicles that are funded and serviced under an
exclusive agreement with a major third-party national bank.
At September 30, 2010, the Companys global retail operations consisted of
1,193 locations, including 1,067 company-operated financial services stores and
126 franchised and agent locations, conducting business primarily under the
names Money Mart(R), Money Shop(R),
Insta-Cheques(R), The Check Cashing Store(R), and
MoneyNow(R) in Canada, the United Kingdom, the United States, the
Republic of Ireland, and Poland. For more information, please visit the
Companys website at www.dfg.com.
Forward Looking Statement
This news release contains forward looking statements, including, among other
things, statements regarding the following: recent acquisitions; the Companys
future results, growth, guidance and operating strategy; the global economy;
the effects of currency exchange rates on reported operating results; the
developing regulatory environment in Canada, the U.K., the United States, and
other countries; the impact of future development strategy, new stores and
acquisitions; litigation matters; and the performance of new products and
services. These forward looking statements involve risks and uncertainties,
including risks related to: the regulatory environments; current and potential
future litigation; the identification of acquisition targets; the integration
and performance of acquired stores and businesses; the performance of new
stores; the impact of debt financing transactions; the results of certain
ongoing income tax appeals; and the effects of new products and services on the
Companys business, results of operations, financial condition, prospects and
guidance; and uncertainties related to the effects of changes in the value of
the U.S. Dollar compared to foreign currencies. There can be no assurance that
the Company will attain its expected results, successfully integrate any of its
acquisitions, or attain its published guidance metrics, or that ongoing and
potential future litigation or the various FDIC, Federal, state, Canadian or
foreign legislative or regulatory activities affecting the Company or the banks
with which the Company does business will not negatively impact the Companys
operations. A more complete description of these and other risks, uncertainties
and assumptions is included in the Companys filings with the Securities and
Exchange Commission, the Companys annual reports and Forms 10-Q and 10-K. You
should not place any undue reliance on any forward-looking statements. The
Company disclaims any obligation to update any such factors or to publicly
announce results of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
SOURCE: Dollar Financial Corp
Dollar Financial Corp
Financial Dynamics
Julie Prozeller, 212-850-5600
Financial Dynamics
Julie Prozeller, 212-850-5600