The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Business Wire

Dollar Financial Corp Consummates Previously Announced Acquisition of Purpose U.K. Holdings Limited, (MEM), the Leading Provider of Internet Loans in the United Kingdom

Friday, April 01, 2011

Dollar Financial Corp Consummates Previously Announced Acquisition of Purpose U.K. Holdings Limited, (MEM), the Leading Provider of Internet Loans in the United Kingdom08:00 EDT Friday, April 01, 2011 BERWYN, Pa. (Business Wire) -- Dollar Financial Corp (NASDAQ:DLLR), a leading international diversified financial services company serving primarily unbanked and under-banked consumers for over 30 years, today announced that its wholly owned U.K. subsidiary, Dollar Financial U.K. Ltd., has completed the acquisition of Purpose U.K. Holdings Limited, the parent company of Month End Money (“MEM”). MEM, which was established in 2003, operates under the brand name PaydayUK and is the market leader in the region, providing loans through both internet and telephony-based technologies throughout the United Kingdom. The initial funding for the transaction was provided by a combination of existing cash and utilization of the Company's recently expanded global revolving credit facility. The total purchase price of the transaction at closing was $195.0 million. Commenting on the acquisition, Jeff Weiss, Dollar's Chairman and Chief Executive Officer, stated, “The expansion of our internet lending platform through the acquisition of MEM, in concert with our significant financial services store footprint, which provides short term consumer loans, secured pawn lending, gold purchasing, check cashing, money transfer, foreign exchange, and a number of other products and services, further strengthens and secures our position as the leading provider of financial services to the unbanked and under-banked consumers in the United Kingdom. We look forward to leveraging the MEM management team and their scalable technology platform, strong business acumen and industry expertise in the future expansion of our global internet lending platform both within the United Kingdom and Canada, as well as to other countries in Europe. As we have experienced little cannibalization of our store based business from our existing internet sales channel in both the U.K. and Canada, the expansion of our internet platform will allow us to reach a new customer demographic in the market place.” “It is our mission to be the leading global provider of financial services to the under-banked and unbanked consumer, which we refer to as the ALICE demographic (or asset limited, income constrained, employed). The ALICE customer segment is increasing all around the globe, and we are squarely focused on expanding our set of products and services and sales channel delivery platforms in existing and new markets to meet their growing needs. Traditional banks are generally not a viable option to help the ALICE demographic with their short-term credit needs, as the loan amounts are typically too small for banks to efficiently service them, while the fees for overdrafts, NSF checks, and other quasi-short term lending vehicles provided by banks and other traditional lenders are generally a more expensive alternative for cash and credit constrained consumers. The development of a global internet platform, hand-in-hand with our credit analytics group, will allow us to reach these consumers in an efficient and cost effective manner.” For the remaining three months of the fiscal year ended June 30, 2011, the Company anticipates the MEM business will contribute approximately $7.0 million of incremental EBITDA inclusive of non-recurring transition expenses. Furthermore, considering additional non-cash amortization expense related to acquired intangible assets as a result of the application of purchase accounting, the MEM business is expected to contribute approximately $0.05 per fully-diluted share during the fiscal fourth quarter ending June 30, 2011. The Company anticipates it will update its earnings guidance for the fiscal year ending June 30, 2011, which will include the MEM transaction, when the Company announces its financial results for the three months ended March 31, 2011. About Dollar Financial Corp Dollar Financial Corp is a leading international diversified financial services company primarily serving unbanked and under-banked consumers and small business owners for over 30 years. Through its retail storefront locations as well as by other means, such as via the Internet, the Company provides a range of consumer financial products and services in seven countries (Canada, the United Kingdom, the United States, the Republic of Ireland, Sweden, Finland and Poland) to consumers who, for reasons of convenience and accessibility, purchase some or all of their financial services from the Company rather than from banks and other financial institutions. The Company's products, principally its short-term consumer loans, check cashing services, secured pawn loans and gold buying services, provide customers with immediate access to cash for living expenses or other episodic needs. The Company also offers high-value ancillary services, including Western Union money order and money transfer products, electronic tax filing, reloadable VISA® and MasterCard® debit cards, foreign currency exchange, and other services. In addition, through its branded Military Installment Loan and Education Services, or MILES® program, the Company provides fee based services to enlisted military personnel applying for loans to purchase new and used vehicles that are funded and serviced under an exclusive agreement with a major third-party national bank. At December 31, 2010, the Company's global retail operations consisted of 1,226 locations, including 1,126 company-operated financial services stores and 100 franchised and agent locations, conducting business primarily under the names Money Mart®, Money Shop®, Insta-Cheques®, The Check Cashing Store®, Sefina® and MoneyNow® in Canada, the United Kingdom, the United States, the Republic of Ireland, Sweden, Finland and Poland. For more information, please visit the Company's website at www.dfg.com. Forward Looking Statement This news release contains forward looking statements, including, among other things, statements regarding the following: pending or recent acquisitions and their expected benefits; the Company's future results, growth, guidance and operating strategy; the global economy; the effects of currency exchange rates on reported operating results; the developing regulatory environment in Canada, the U.K., the United States, and other countries; the impact of future development strategy, new stores and acquisitions; litigation matters; expected financing initiatives; and the performance of new products and services. These forward looking statements involve risks and uncertainties, including risks related to: the regulatory environments; current and potential future litigation; the identification of acquisition targets; the consummation of announced pending acquisitions, the integration and performance of acquired stores and businesses; the performance of new stores; the impact of debt financing transactions; the results of certain ongoing income tax appeals; and the effects of new products and services on the Company's business, results of operations, financial condition, prospects and guidance; and uncertainties related to the effects of changes in the value of the U.S. Dollar compared to foreign currencies. There can be no assurance that the Company will attain its expected results, successfully consummate announced pending acquisitions, successfully integrate any of its acquisitions, obtain acceptable financing, or attain its published guidance metrics, or that ongoing and potential future litigation or the various FDIC, Federal, state, Canadian, U.K. or foreign legislative or regulatory activities affecting the Company or the banks with which the Company does business will not negatively impact the Company's operations. A more complete description of these and other risks, uncertainties and assumptions is included in the Company's filings with the Securities and Exchange Commission, the Company's annual reports and Forms 10-Q and 10-K. You should not place any undue reliance on any forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments. Dollar Financial CorpFinancial DynamicsJulie Prozeller/Amy Pesante, 212-850-5600