First Cash Financial Services Inc., an Arlington, Tex., pawn and payday lender, said Monday that it has sold some assets of its Auto Master unit to Interstate Auto Group Inc., a Minneapolis company that does business as CarHop.
Like Auto Master, CarHop runs "buy-here/pay-here" used car dealerships. It bought the unit's inventory of cars, assumed all the leases, and hired many of the employees, First Cash said.
CarHop also agreed to manage collection on outstanding auto receivables held by First Cash for a fee.
First Cash did not say how much it received for the inventory, though Rick Wessel, its chief executive, said in a press release that it expects "to realize significant future cash flow from the collection of our existing notes receivable portfolio."
He called CarHop "an established industry operator with the ability to maximize the collections on this portfolio."
First Cash will use cash flow and tax benefits from the transaction to finance the expansion of its pawn operations in Mexico and the United States and to reduce debt, Mr. Wessel said. The company had said in September that it planned to sell or liquidate Auto Master.
