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Rent-A-Center Enters Into Definitive Agreement to Acquire Acima

Furniture World News Desk on 12/22/2020


Rent-A-Center, Inc. has announced that it has entered into a definitive agreement to acquire Acima Holdings LLC, a leading provider of virtual lease-to-own solutions. Total consideration consists of $1.273 billion in cash and approximately 10.8 million shares of Rent-A-Center common stock currently valued at $377 million. The transaction is expected to close in the first half of 2021 subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

Acima is a fast growing, profitable LTO fintech company with a national presence in retail partner stores and e-commerce platforms, and a broad range of product verticals. Founded in 2013 in Salt Lake City, Utah, Acima has grown annual revenues from $97 million in 2016 to an expected $1.25 billion in 2020. Acima will continue to operate out of Salt Lake City and will incorporate the complementary Preferred Dynamix platform to create a frictionless LTO experience for consumers and retail partners. Upon the closing of the transaction, the current Acima management team will report to Preferred Dynamix Executive Vice President Jason Hogg, and the combined business will be reported in the Preferred Lease segment.

“We’re excited to welcome Acima to the Rent-A-Center family,” said Mitch Fadel, Chief Executive Officer, Rent-A-Center. “Founder Aaron Allred and his team have created a leading virtual LTO solution for retailers and consumers. We all share a common vision to expand the virtual LTO offering across a broader set of retail partners and to meet the needs of more customers through an integrated omnichannel strategy. Acima will help us strengthen our organization, accelerate growth and increase our virtual partner base, allowing us to better serve more consumers with the flexibility of LTO.”
Jason Hogg, Executive Vice President, Preferred Dynamix, added: “This combination marries Acima’s advanced decisioning with Preferred Dynamix’s complementary and proprietary digital platform. The resulting set of fintech capabilities will support faster innovation, allowing us to bring aspirational brands to consumers across a broader set of e-commerce and retail partners.”

Strategic Rationale and Benefits of the Transaction

  • Accelerates Rent-A-Center’s position as a premier fintech platform across both traditional and virtual lease-to-own solutions.
  • Further diversification of retail partner base, product verticals and enhanced ability to compete for high-value national retail accounts.
  • Sophisticated underwriting and decision engine, with expanding digital payment solutions and communication along with a superior back-end infrastructure to support customer and LTO partner needs.
  • The addition of key leadership and high-performing sales team with a proven track record and winning culture; the Company will retain core Acima management including its national sales structure.
  • Expanded e-commerce platform and effective integration at point-of-sale to support retail partner digital transactions.
  • Strong synergy potential with both Rent-A-Center and Preferred Lease segments.

“We’re thrilled to be part of a Rent-A-Center team that’s modernizing LTO to serve the estimated over 60 million unbanked and underbanked consumers in the United States,” said Mr. Allred. “We share Mitch and Jason’s vision to create the most dynamic LTO omni-channel shopping experience in the industry.”

Rent-A-Center has obtained $1.825 billion in debt financing commitments from J.P. Morgan Securities LLC, Credit Suisse and HSBC Securities (USA) Inc., in connection with the transaction, subject to the terms and conditions of the respective commitment letters.
J.P. Morgan Securities LLC is serving as lead financial advisor; Credit Suisse is serving as an additional financial advisor and Sullivan & Cromwell LLP is serving as legal counsel to Rent-A-Center. FT Partners is serving as sole strategic and financial advisor and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Acima.

About Rent-A-Center, Inc.: Rent-A-Center, Inc. (NASDAQ: RCII) is an industry leading omni-channel lease-to-own provider for the credit constrained customer. The Company focuses on improving the quality of life for its customers by providing access and the opportunity to obtain ownership of high-quality, durable products via small payments over time under a flexible lease-purchase agreement and no long-term debt obligation. Preferred Lease provides virtual and staffed lease-to-own solutions to retail partners in stores and online enabling our partners to grow sales by expanding their customer base utilizing our differentiated offering. The Rent-A-Center Business and Mexico segments provide lease-to-own options on products such as furniture, appliances, consumer electronics, and computers in approximately 1,950 Rent-A-Center stores in the United States, Mexico, and Puerto Rico and on its e-commerce platform, Rentacenter.com. The Franchising segment is a national franchiser of approximately 460 franchise locations. Rent-A-Center is headquartered in Plano, Texas. For additional information about the Company, please visit our website at Rentacenter.com.