Rent-A-Center to buy Acima Holdings in $1.65 bln deal (updated)

Upbound

21/12/2020 08:34

(Adds details)
    Dec 21 (Reuters) - Rent-A-Center Inc  RCII.O  said on Sunday
it would buy Acima Holdings LLC for $1.65 billion in a
cash-and-stock deal as it looks to build out its fintech
platform across traditional and online lease-to-own businesses.
    The deal includes $1.27 billion in cash and about 10.8
million Rent-A-Center common shares currently valued at $377
million, the company said in a statement. 
    Rent-A-Center is a rent-to-own business, allowing customers
to rent furniture, electronics and other goods with the option
of eventually purchasing them.
    Purchasing Acima, which operates its lease-to-own (LTO)
business out of 15,000 retail partner locations, will help
Rent-A-Center expand its e-commerce platform and integrate a
point-of-sale to support digital transactions.
    "Acima will help us strengthen our organization, accelerate
growth and increase our virtual partner base," Rent-A-Center
Chief Executive Officer Mitch Fadel said.
    Acima is expected to generate about $1.25 billion in 2020
revenue and $225 million in adjusted earnings before interest,
taxes, depreciation and amortization, Rent-A-Center said.
    Rent-A-Center said it had received $1.83 billion in debt
financing from J.P. Morgan Securities LLC, Credit Suisse and
HSBC Securities Inc to fund the deal.
    The company's shares closed at $35.22 on Friday, up 22% for
the year and giving the company a valuation of $1.9 billion. 
    The acquisition is expected to close in the first half of
2021.
    J.P. Morgan is acting as a lead financial adviser to
Rent-A-Center while Acima is being advised by FT Partners.    
    

 (Reporting by Ann Maria Shibu and Nivedita Balu in Bengaluru;
Editing by Aditya Soni and Anil D'Silva)
 ((AnnMaria.Shibu@thomsonreuters.com; +1 646 223 8780;  + 91 80
6749 2795;))