(Reuters) – Rent-A-Center Inc said on Sunday it would buy Acima Holdings LLC for $1.65 billion in a cash-and-stock as it looks to build out its fintech platform across both 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 shares closed at $35.22 on Friday, up 22% for the year and giving the company a valuation of $1.9 billion.
Acima, which operates its lease-to-own business out of 15,000 retail partner locations, is expected to generate about $1.25 billion in 2020 revenue and $225 million in adjusted earnings before interest, taxes, depreciation and amortization
“Acima will help us strengthen our organization, accelerate growth and increase our virtual partner base,” Rent-A-Center Chief Executive Officer Mitch Fadel 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 acquisition is expected to close in the first half of 2021.
J.P. Morgan is acting as lead financial adviser to Rent-A-Center while Acima is being advised by FT Partners.
Reporting by Ann Maria Shibu in Bengaluru; Editing by Aditya Soni and Anil D’Silva