PLANO, Texas--(BUSINESS WIRE)--Aug. 14, 2019--
Rent-A-Center, Inc. (NASDAQ: RCII) (“Rent-A-Center” or the “Company”) today announced that it has completed the previously announced acquisition of substantially all of the assets of C/C Financial Corp d/b/a Merchants Preferred (“Merchants Preferred”), a nationwide provider of virtual rent-to-own services. This transaction is expected to accelerate Rent-A-Center’s virtual rent-to-own growth.
“We are thrilled to welcome Merchants Preferred into the Rent-A-Center family. Merchants Preferred complements our existing capabilities and the combined organization will have the most comprehensive offering in the industry,” stated Mitch Fadel, Chief Executive Officer of Rent-A-Center. “Merchants Preferred brings a proven technology platform, scalable infrastructure and a strong centralized retail partner support team that will enable us to execute against our growth goals in the over $20 billion virtual rent-to-own industry,” said Fadel.
With the close of the deal, Joe Corona, President and Chief Executive Officer of Merchants Preferred, now joins Rent-A-Center and will continue to lead the virtual strategy. “We are excited to join the Rent-A-Center team and scale the technology platform and capabilities we have worked hard to build over the last seven years,” stated Joe Corona.
Rent-A-Center has updated its annual revenue, net debt and net debt to adjusted EBITDA guidance to reflect the expected impact of the Merchants Preferred acquisition. The Company will include Merchants Preferred in the Acceptance Now segment. Revenue in the segment is now expected to be $725 million to $745 million, up from $700 million to $715 million. Due to the funding of the acquisition the Company expects net debt to be $225 million to $195 million, up from $195 million to $165 million. Additionally, net debt to adjusted EBITDA is expected to be 1.0 times to 0.7 times, up from 0.9 times to 0.6 times.
Additional details can be found on the Company’s investor relations website at https://investor.rentacenter.com in the presentation titled ‘RCII Q2 2019 – Revised Guidance’.
About Rent-A-Center, Inc.
A rent-to-own industry leader, Plano, Texas-based, Rent-A-Center, Inc., is focused on improving the quality of life for its customers by providing them the opportunity to obtain ownership of high-quality, durable products such as consumer electronics, appliances, computers, furniture and accessories, under flexible rental purchase agreements with no long-term obligation. The Company owns and operates approximately 2,200 stores in the United States, Mexico and Puerto Rico, and approximately 1,100 Acceptance Now kiosk locations in the United States and Puerto Rico. Rent-A-Center Franchising International, Inc., a wholly owned subsidiary of the Company, is a national franchiser of approximately 320 rent-to-own stores operating under the trade names of “Rent-A-Center,” “ColorTyme,” and “RimTyme.” For additional information about the Company, please visit its website at www.rentacenter.com.
About Merchants Preferred
Merchants Preferred, founded in 2012 and based in Atlanta, Georgia, is a nationwide provider of virtual rent-to-own services for non-prime customers. Merchants Preferred’s advanced technology, back office infrastructure and outstanding service enables competitive customer and retailer value propositions. Additionally, they are led by a highly experienced management team with experience in the non-prime consumer space.
Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "could," "estimate," "predict," "continue," "should," "anticipate," "believe," or “confident,” or the negative thereof or variations thereon or similar terminology. The Company believes that the expectations reflected in such forward-looking statements are accurate. However, there can be no assurance that such expectations will occur. Factors that could impact such expectations include, but are not limited to: the Company's ability to realize the strategic benefits from the acquisition of substantially all the assets and assumption of certain liabilities of C/C Financial Corp., a Delaware Corporation d/b/a Merchants Preferred ("Merchants Preferred" and the acquisition thereof, the "Merchants Preferred Acquisition"), including achieving expected growth rates, synergies and operating efficiencies from the Company's acquisition; the Company's ability to successfully integrate Merchants Preferred's operations which may be more difficult, time-consuming or costly than expected; operating costs, loss of retail partners and business disruption arising from the Merchants Preferred Acquisition; the ability to retain certain key employees at Merchants Preferred; risks related to Merchants Preferred’s virtual rent-to-own business; the Company's transition to more-readily scalable, “cloud-based” solutions; the Company's ability to develop and successfully implement digital or E-commerce capabilities, including mobile applications; information technology and data security costs; the impact of any breaches in data security or other disturbances to the Company's information technology and other networks and the Company's ability to protect the integrity and security of individually identifiable data of its customers and employees; the general strength of the economy and other economic conditions affecting consumer preferences and spending; factors affecting the disposable income available to the Company's current and potential customers; changes in the unemployment rate; the Company's ability to identify and successfully market products and services that appeal to its customer demographic; consumer preferences and perceptions of the Company's brand; the Company's ability to enter into new and collect on its rental or lease purchase agreements; the passage of legislation adversely affecting the rent-to-own industry; litigation or administrative proceedings to which the Company is or may be a party to from time to time; and the other risks detailed from time to time in the Company's SEC reports, including but not limited to, its Annual Report on Form 10-K for the year ended December 31, 2018, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019.
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Source: Rent-A-Center, Inc.
EVP, Chief Financial Officer