FirstCash strikes $1.17 billion deal to move into buy now, pay later space - The Dallas Morning News

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Pawn shop operator FirstCash Inc. is moving into the “buy now, pay later” space with a $1.17 billion acquisition of American First Finance Inc.

The Fort Worth-based company announced the cash and stock deal early Thursday with the fourth-largest provider of point-of-sale payments. That is one of the fastest-growing financial services sectors and the market is estimated to be worth $600 billion, according to FirstCash.

FirstCash operates over 2,800 pawn shops in the U.S. and Latin America.

CEO Rick Wessel said the deal gives FirstCash a “highly profitable and scaled platform with industry leading [lease-to-own] and retail finance capabilities.”

“This transaction diversifies us beyond our core pawn business with the addition of a fast-growing segment that significantly expands our customer base,” Wessel said in a statement. “We believe there are opportunities to utilize American First Finance’s platform to bring flexible payment options to our pawn stores to drive even faster inventory turns and supplement our existing retail layaway product.”

The deal consists of 8.05 million shares of FirstCash stock and $406 million in cash. The transaction value could grow by up to $300 million if American First Finance meets financial targets through the first half of 2023.

Founded more than 30 years ago, FirstCash became one of the nation’s largest pawn shop operators with its 2016 purchase of Cash America.

Wichita, Kan.-based American First Finance will become a Dallas-based business unit of FirstCash when the deal closes. It will be led by Howard Hambleton, American First Finance’s president and CEO.

Doug Rippel, founder and chairman of American First Finance, said he created the company in 2013 to provide flexible payment options to “millions of consumers without pristine credit.”

“FirstCash shares our vision of providing retail financing alternatives to underserved customers,” said Rippel, who will join FirstCash’s board of directors and retain a nearly 17% ownership stake in the combined company.

American First Finance generated $350 million in revenue last year and that’s expected to grow to $600 million this year and $800 million next year, according to the companies. Its network includes 6,500 stores and e-commerce platforms.

The deal is expected to close later this year or early next year, pending regulatory approvals.

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FirstCash strikes $1.17 billion deal to move into buy now, pay later space - The Dallas Morning News
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