Fort Worth pawn giant makes $1.17B acqusition into growing lease-to-own space

Fort Worth-based FirstCash Inc. (Nasdaq: FCFS), which operates over 2,800 retail pawn stores in the U.S. and Latin America, on Oct. 28 announced that it will acquire American First Finance Inc., a rapidly growing, technology-driven virtual lease-to-own (“LTO”) and retail finance provider focused on underserved, non-prime customers in a deal valued at $1.17 billion.  

Under the terms of the agreement, the total consideration payable at closing is valued at approximately $1.17 billion, based on FirstCash’s closing stock price on Oct. 26, 2021, consisting of approximately 8.05 million shares of common stock and $406 million in cash, subject to a net debt adjustment. Up to an additional $300 million of consideration is payable in the event AFF achieves certain performance targets through the first half of 2023.

The addition of American First Finance launches FirstCash into the large and growing point-of-sale (“POS”) and buy now pay later payment space, which is estimated to have a $600 billion total addressable market1. AFF is the fourth largest provider of POS payment solutions to underserved retail customers in the U.S. with significant scale. AFF serves customers through its differentiated omnichannel strategy, utilizing sophisticated underwriting models and its e-commerce capabilities.

Rick Wessel, FirstCash Chief Executive Officer and Vice-Chairman of the Board stated, “Since our founding more than 30 years ago and through the merger of First Cash and Cash America in 2016, we have successfully executed on our growth strategy and established FirstCash as a leading retailer and provider of financial services to underserved consumers, while delivering significant value to shareholders. Building on the complementary strengths of FirstCash and American First Finance, this transaction 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.”

- FWBP Digital Partners -

Mr. Wessel continued, “With the tremendous growth in the retail POS finance and buy now pay later space, AFF is an ideal partner for FirstCash, bringing a highly profitable and scaled platform with industry leading LTO and retail finance capabilities, a large and highly reputable merchant base and an experienced management team. Working with American First Finance, we believe we are well positioned to drive further expansion in this large and growing addressable market. In addition, we believe there are opportunities to utilize American First Finance’s platform to bring flexible payment options to our pawn stores to drive even faster inventory turns and supplement our existing retail layaway product. We are excited to welcome AFF’s talented team and look forward to the opportunities ahead to serve more customers than ever.”

Doug Rippel, Chairman and Founder of American First Finance stated, “When I founded AFF in 2013, I set out to provide millions of consumers without pristine credit with flexible payment solutions to acquire durable goods and services, and I am incredibly proud of what we’ve built. FirstCash shares our vision of providing retail financing alternatives to underserved customers, and with its strong operational track record, we are confident that AFF will be even better positioned to grow its customer and merchant base and continue supporting their needs. I look forward to being a significant shareholder and joining the FirstCash Board of Directors to help guide our combined company going forward.”

FirstCash officials note that the acquisition will facilitate FirstCash’s Entrance into Large and Growing POS Payments Market, expand product offerings, leverage integrated technology, data, ecommerce and mobile capabilities, provide revenue and earnings growth opportunities and generate strong cash flow. More information is available on FirstCash’s website.

Jefferies LLC is acting as lead financial advisor to FirstCash, with Comstock Capital & Advisory Group acting as additional financial advisor and Alston & Bird acting as legal advisor. Stephens Inc. is acting as financial advisor to AFF and King & Spalding LLP is acting as legal advisor.