FirstCash (FCFS) announced on Oct. 28 that it will be acquiring American First Finance, Inc. for approximately $1.17 billion. The deal consists of around 8.05 million shares of FCFS common stock, plus $406 million in cash, subject to a net debt adjustment.
As of 10:55 am EDT today, FCFS shares had slipped 0.82% in value.
American First Finance’s Virtual Lease-to-Own, Retail Finance Platform
American First Finance operates a technology-driven virtual lease-to-own and retail finance platform that zeroes in on “underserved, non-prime customers.” According to FirstCash, the purchase of American First Finance will launch FirstCash “into the large and growing point-of-sale (POS) and buy now pay later payment space.” The POS space is estimated to have a $600 billion total addressable market. AFF is the fourth largest provider of POS payments in the U.S.
FirstCash CEO Comments
“Building on the complementary strengths of FirstCash and American First Finance,” FirstCash CEO Rick Wessel remarked in a news release, “this transaction [acquiring American First Finance] diversifies us beyond our core pawn business with the addition of a fast-growing segment that significantly expands our customer base and introduces a scalable, technology-driven product set into our organization.”
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FirstCash Inc Financial Services operates pawn stores in the United States and Latin America. Its primary business involves making small loans secured by personal property. These pawn loans give the borrower the option of either repaying the loans with interest or forfeiting the property without further penalty. Close to 30% of total company revenue comes from interest earned on the loans. Close to 70% of total revenue comes from reselling forfeited property in the company's retail stores. Revenue is split almost equally between loans made in the United States, where the company has more than 300 retail locations, and loans made in Latin America, where the company has over 700 locations in Mexico and several more in Guatemala.