CURO to acquire Heights Finance, a leading consumer finance company, for $ 360 million



WICHITA, Kansas – (BUSINESS WIRE) – CURO Group Holdings Corp. (NYSE: CURO) (“CURO”), a technology-enabled omnichannel consumer finance company serving non-prime and prime consumers in the US and Canada, announced today that it has entered in a definitive agreement to acquire Heights Finance, a consumer finance company that offers installment loans and offers customary optional insurance and other financial products, from Milestone Partners, a private equity firm based in Radnor, Pennsylvania. The total consideration of $ 360 million is comprised of $ 335 million in cash and $ 25 million of CURO common shares.

Heights Finance primarily serves near prime and non-prime clients through a network of 390 branches in 11 southern and midwestern states. The acquisition is expected to accelerate CURO’s transition to long-term credit products, higher balances and lower rates. For the 12 months ended September 30, 2021, Heights Finance had revenue of $ 235 million and adjusted income before taxes of $ 34 million.

“By adding Heights Finance’s established customer base, experienced loan portfolio, and significant branch network, we will solidify our position as a full-spectrum non-primary consumer lender in the US,” said Don Gayhardt, Principal CURO executive. “The combination diversifies the product, revenue, customer and geographic mix for our US business and improves our overall growth, profitability and risk profiles. The transaction brings together two complementary businesses that similarly prioritize credit, risk analysis and regulatory compliance. We believe we are well positioned to significantly grow our combined operations as Heights Finance offers us opportunities to expand into new geographic markets, leverage our omnichannel capabilities, and cross-sell some of our card products. We are excited to welcome the Heights Finance team to CURO and look forward to executing on our significant growth opportunities together. ”

“We are proud of our history of leveraging our flexible installment lending platform to meet the needs of the millions of hardworking Americans who are not served by traditional credit providers and we are delighted to join forces with CURO to accelerate our trajectory of growth, “said Doug Clark. Executive Director of Heights Finance. “We consider CURO an ideal strategic partner, as its industry-leading omnichannel expertise and related technology, data science, and proprietary underwriting capabilities promise to further enhance our branch delivery and service, increase our online capabilities, and drive synergies. of income and costs. CURO’s strong capital position and diversified funding sources also create the opportunity to lower our cost of debt equity. ”

The total purchase price of the $ 360 million acquisition represents 6.5x Heights Finance’s estimated adjusted earnings for 2022 before taxes of $ 55 million. The acquisition is immediately added to CURO’s earnings. The transaction has been approved by the CURO Board of Directors and is expected to close no later than the first quarter of 2022, subject to customary closing conditions, including license approvals. CURO expects to finance the acquisition through a combination of cash and existing debt.

Advisers

Jefferies LLC acted as sole financial advisor and King & Spalding LLP acted as legal advisor to CURO in this transaction. Troutman Pepper served as legal counsel to Heights Finance on this transaction.

Investor conference call

CURO and Heights Finance will hold a joint conference call to discuss the transaction today at 8:00 am ET. The call will include a discussion of the transaction followed by a question and answer session with CURO and Heights Finance management. You can access the call at 1-833-953-2430 (1-412-317-5759 for international calls). Ask to join the CURO Group Holdings call. To access the live stream, interested parties are invited to visit the investor relations section of the Company’s website at http://ir.curo.com/. A companion investor presentation providing more details on Heights Finance and the acquisition is available in the “Events and Presentations” section of the CURO Investor website at https://ir.curo.com/events-and-presentations.

File: A recorded replay of this call will be available until December 1, 2021 at 8:00 am ET. You can access the conference call replay at 1-877-344-7529 (1-412-317-0088 for international calls). The replay access code is 10162144. An archived version of the webcast will be available on the CURO Investors website for one year.

Refinancing Canada’s SPV Financing Service Without Recourse

Last week, CURO signed a refinancing of its Canadian SPV financing facility without recourse. The incumbent, Waterfall Asset Management, provided an attractive upgrade and extension that lowered total cost by 200 basis points, expanded total capacity including accordion from C $ 250 million to C $ 450 million, extended maturity in three years to August 2026, increased the advance rate from 80% to 90%, expanded eligibility to include Flexiti’s non-prime loans, and added the ability to securitize from the line of credit.

Forward-looking statements

This press release contains forward looking statements. These forward-looking statements include statements regarding projections, estimates and assumptions about the impact of the transaction on us, including our belief that the acquisition will accelerate our transition to lower-rate, higher-balance, long-term credit products; solidify our position as a full spectrum consumer non-prime lender in the US improve our overall growth, profitability and risk profiles; grow our combined operations; and lower cost debt capital; Heights’ estimated adjusted earnings before taxes; timing of the closing of the transaction and sources of financing. Also, words like “orientation”, “estimate”, “anticipate”, “believe”, “forecast”, “advance”, “plan”, “predict”, “focused”, “project”, “likely,” expect “,” pretend “,” should “,” will “,” confident “, variations of such words and similar expressions are intended to identify forward-looking statements. The ability to achieve these forward-looking statements is based on certain assumptions, judgments and other Factors, both within and beyond our control, that could cause actual results to differ materially from those in forward-looking statements, including: the inability of the parties to successfully or timely consummate the proposed transaction, including the risk that the proposed transaction will not be completed. obtain the required regulatory approvals, are delayed, or are subject to unforeseen conditions that could adversely affect the combined company or the expected benefits of the proposed transaction; failure to meet anticipated benefits of the proposed transaction; risks related to the uncertainty of the projected financial information; the effects of competition on the future business of the combined company; our ability to attract and retain customers; market, financial, political and legal conditions; the impact of the COVID-19 pandemic or any other global event on the combined company’s business and global economy; our dependence on external lenders to provide the cash we need to finance our loans and our ability to access third-party financing affordably; errors in our internal forecasts; our level of indebtedness; our ability to integrate acquired businesses; actions of regulators and the negative impact of those actions on our business; our ability to protect our proprietary technology and analytics and keep up with that of our competitors; disruption of our information technology systems that adversely affect our business operations; ineffective pricing of the credit risk of our current or potential customers; inaccurate information provided by clients or third parties that could lead to errors in judging clients’ qualifications to receive loans; improper disclosure of customer personal data; failure of third parties providing products, services or support to us; any default by third-party lenders that we rely on for business in certain states; disruption of our relationships with banks and other third-party electronic payment solution providers, as well as other factors discussed in our filings with the Securities and Exchange Commission. These projections, estimates and assumptions may prove inaccurate in the future. These forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties that are difficult to predict with respect to the timing, scope, probability and degree of occurrence. There may be additional risks that we are not currently aware of or that we currently believe are irrelevant and that could also cause actual results to differ from those contained in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictions of actual future results. We do not undertake any obligation to update, modify or clarify any forward-looking statement for any reason.

About CURO

CURO Group Holdings Corp. (NYSE: CURO) serves the changing needs of the financial consumer. In 1997, the Company was founded in Riverside, California by three childhood friends from Wichita, Kansas, to meet consumers’ growing need for short-term loans. Its success led to store openings in the United States, then expanded to offer online loans and financial services in the United States and Canada, and now expanded to a full-spectrum consumer lender through point of sale / buy. now pay back channel. CURO combines its experience in the market with fully integrated technology platforms, an omnichannel approach and advanced credit decisions to provide a variety of credit products in all media. CURO operates under a number of brands including Speedy Cash®, Rapid Cash®, Cash Money®, LendDirect®, Flexiti®, Avío Credit®, Opt + ® and Revolve Finance®. With over 20 years of operating experience, CURO brings financial freedom to non-core consumers.

About Heights Finance

Headquartered in Greenville, SC, with offices and branches in the states of Alabama, Georgia, Texas, Oklahoma, South Carolina, Wisconsin, Illinois, Missouri, Indiana, Kentucky, and Tennessee, Heights Finance offers short and long-term personal loans designed to help hard-working Americans get the money they need quickly. The company is a proud member of the American Financial Services Association (AFSA) and currently has a Trustpilot customer rating of 4.9.

For more information visit https://www.heightsfinance.com/.

(CURO-NWS)

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