The Austin payday and pawn lender EZCorp has closed on the purchase of Value Financial Services Inc., a deal that was struck in June and almost fell through.
Value operated 67 pawnshops in Florida, Tennessee, Georgia, and Mexico. EZCorp paid about $115.9 million for the company, including $35 million to satisfy its debts.
EZCorp's president and chief executive officer, Joe Rotunda, said in a press release Friday that Value "is an excellent acquisition in very good pawn markets." EZCorp now has 412 pawnshops in the United States and Mexico and 478 U.S. loan stores.
John Thedford, Value's former CEO, "made the decision not to join the EZCorp team," Mr. Rotunda said.
In August, Value's shareholders and board voted against the deal, reasoning that it undervalued the company. In a Dec. 2 regulatory filing, EZCorp said Value's board had observed that the "decline in the United States economy … had caused the pawn industry to experience substantial growth in the first half of 2008." From May to July, the filing said, Value "had experienced higher than expected financial performance."
Value held discussions with a private-equity firm but ultimately revised its deal with EZCorp so that shareholders could choose to be compensated with either cash or stock rather than having to accept a combination of the two.
EZCorp also agreed to provide some price protections to Value's former shareholders. If they sell EZCorp stock received in the merger within 125 days after the closing and get less than $14.67 a share, EZCorp is to pay them the difference, up to $4.01 per share.