When 2 Pawn Giants Become 1
Shares of First Cash Financial Services Inc. (NASDAQ: FCFS) and Cash America International Inc. (NYSE: CSH) were dragging their feet on Wednesday after the companies announced the shareholder approval of their merger. This ultimately will be a merger of equals, and the transaction is expected to close on September 1. The newly combined company will be called FirstCash and will begin trading under the ticker FCFS on September 2.
First Cash has over 1,270 retail and consumer lending locations in North America, and it is a leading international operator of pawn stores. The company focuses on serving cash and credit constrained consumers through its retail pawn locations, which buy and sell a wide variety of merchandise, as well as make small consumer pawn loans secured by pledged personal property. About 97% of revenues come from pawn operations.
Cash America operates around 900 locations in the United States, offering pawn lending and related services to consumers. In terms of the breakdown, the company has 817 lending locations and roughly 72 check cashing centers (all of which are unconsolidated franchised check cashing centers).
Rick L. Wessel, CEO of First Cash, and T. Brent Stuart, president and CEO of Cash America, released a joint statement saying:
We are extremely pleased with the exceptionally strong support of both sets of shareholders in approving the merger between Cash America and First Cash. We are now focused on successfully integrating the businesses and realizing the anticipated benefits of the merger that will bring together the leading pawn lenders in both the U.S. and Latin American markets. The combined company will have over 2,000 locations in the U.S. and Latin America with total annual revenue of approximately $1.8 billion, which we believe represents the largest pawn lender in the world.
Shares of First Cash traded down 1.8% at $51.80 on Wednesday, with a consensus analyst price target of $54.50 and a 52-week trading range of $29.64 to $53.95.
Cash America was last seen down 1.8% at $43.46. The consensus price target is $42.60, and the 52-week range is $26.00 to $45.67.