CURO Group Holdings Corp. positioned to take advantage of Katapult’s announced merger with FinServ Acquisition Corp.
WICHITA, Kan .– (COMMERCIAL THREAD) – CURO Group Holdings Corp. (NYSE: CURO) (“CURO”), a market leader in providing credit to unprivileged consumers, today announced that it is able to benefit from today’s announcement that Katapult Holding, Inc. (“Katapult”), a company approximately 40% owned by CURO and a leading provider of online point-of-sale (“POS”) leasing purchase options for unprivileged US consumers, and FinServ Acquisition Corp. (Nasdaq: FSRV) (“FinServ”), a publicly traded special purpose acquisition company (“SPAC”), have entered into a definitive merger agreement. Katapult’s own stock at $ 908 million, which includes a earn-out of up to $ 75 million in additional common shares in the new public company.
Based on CURO’s stake in Katapult, the transaction announced today will provide CURO with cash and equity consideration of the new company of $ 365 million, which includes a earn-out of up to $ 30 million under the form of additional ordinary shares in the new public enterprise. To date, CURO has made a total cash investment in Katapult of $ 27.5 million.
“We started investing in Katapult in 2017 because we identified several catalysts for future success: an innovative e-commerce point-of-sale business model, a focus on the large and under-penetrated non-privileged finance market, and a clear and compelling value proposition for merchants and consumers. . We have appreciated our partnership with the experienced and talented management team at Katapult and are proud of the steps taken to make today’s announcement possible, ”said Don Gayhardt, President and CEO of CURO and Member of the Board of Directors of Katapult. “Katapult CEO Orlando Zayas and the company’s management team are top notch and we believe Katapult is well positioned to continue to be successful as a public company with even greater access to capital,” an improved brand and an accelerated growth trajectory. ”
“This transaction is clearly a victory for CURO and its shareholders. Once completed, the transaction will increase our cash balances, providing greater balance sheet flexibility for potential opportunities, including strategic mergers and acquisitions that will broaden our product offerings and market reach. In addition, we will retain a significant stake in Katapult and will be represented on the board of directors of the new public company. This gives us the opportunity to continue to be a part of Katapult’s future direction as the company strengthens its position as the leading online point-of-sale financing platform focused on non-privileged consumers, ”concluded Gayhardt.
Upon closing of the transaction, CURO expects to receive up to $ 125 million in cash and retain a minimum 21% stake in the fully diluted shares of the new public company. The combination of the final consideration between cash and shares will vary based on redemptions by SAVS investors and certain other adjustments. The transaction is expected to close in the first half of 2021 and remains subject to FinServ shareholder approval and other customary closing conditions. As detailed in the press release from Katapult and FinServ, the Boards of Directors of Katapult and FinServ unanimously approved the transaction.
More details on the transaction can be found in the press release and investor presentation of Katapult and FinServ, which are available in the “Investors” sections of the FinServ website at https://finservacquisition.com and the Katapult website at https://go.katapult.com/investor_relations, which CURO provides for informational purposes only.
An additional investor presentation providing more details on the impact of the transaction on CURO is available in the “Events and Presentations” section of the CURO Investor website at https://ir.curo.com/events-and-presentations.
This press release contains forward-looking statements. These forward-looking statements include statements regarding projections, estimates and assumptions regarding the value of Katapult’s equity; the impact of the transaction on CURO, including the total consideration that we expect to receive and the combination of cash and shares and potential earn-out; the intended uses of such consideration and our expectations for increased cash balances; CURO’s ownership and interest in Katapult after the closing of the transaction; the future success of Katapult; and the expected timing of the transaction. In addition, words such as “direction”, “estimate”, “anticipate”, “believe”, “anticipate”, “step”, “plan”, “predict”, “focused”, “project”, “is likely , “” Expect “,” intend “,” should “,” will “,” confident “, variations of these words and similar expressions are intended to identify forward-looking statements. The ability to make these forward-looking statements is based on certain assumptions, judgments and other factors, both within our control and beyond our control, which could cause actual results to differ materially from those of forward-looking statements, including: ” inability of the parties to successfully or on time complete the proposed transaction, including the risk that the required regulatory approvals will not be obtained, be delayed or be subject to unforeseen conditions that could adversely affect the combined company or the benefits expected from the proposed transaction or that FinServ shareholder approval is not obtained; failure to realize the expected benefits of the proposed transaction; risks related to the uncertainty of projected financial information concerning Katapult; the effects of competition on Katapult’s future business; Katapult’s ability to attract and retain customers; market, financial, political and legal conditions; the impact of the COVID-19 pandemic on Katapult, our business and the global economy; the risks associated with the concentration of Katapult’s activity among a relatively small number of traders; the ability of FinServ or the Combined Company to issue shares or equity-linked securities or to obtain debt financing in connection with the proposed transaction or in the future; our reliance on third-party lenders to provide the liquidity we need to fund our loans and our ability to access third-party financing at an affordable price; errors in our internal forecasts; our level of debt; our ability to integrate acquired businesses; our reliance on third-party lenders to provide the liquidity we need to fund our loans and our ability to access third-party financing at an affordable price; the actions of regulators and the negative impact of these actions on our activities; our ability to protect our proprietary technology and analytics and to track those of our competitors; disruption of our information technology systems that adversely affects our business operations; inefficient pricing of the credit risk of our potential or existing customers; inaccurate information provided by clients or third parties which could lead to errors in the assessment of clients’ qualifications to receive loans; inappropriate disclosure of customer personal data; the failure of third parties who provide us with products, services or support; any default by third party lenders on whom we rely to do business in certain states; the disruption of our relationships with banks and other providers of third-party electronic payment solutions; disruption caused by theft and employee or third party errors in our stores; and other factors discussed in our filings with the Securities and Exchange Commission. These projections, estimates and assumptions may prove to be inaccurate in the future. These forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties which are difficult to predict as to the timing, extent, likelihood and degree of occurrence. There may be additional risks that are not currently known to us or that we currently believe to be insignificant and which could also cause actual results to differ from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual future results. We assume no obligation to update, modify or clarify any forward-looking statement for any reason.
CURO Group Holdings Corp. (NYSE: CURO), operating in two countries and powered by its fully integrated technology platform, is a provider of unprivileged consumer credit. In 1997, the company was founded in Riverside, Calif., By three childhood friends from Wichita, Kansas, to meet growing consumer needs for short-term loans. Their success has led to the opening of stores across the United States and an expansion to offer online loans and financial services in two countries. Today, CURO combines its market expertise with a fully integrated technology platform, omnichannel approach and advanced credit decisions to deliver a range of credit products across all media. CURO operates under several brands, including Speedy Cash®, Rapid Cash®, Cash Money®, LendDirect®, Avío Credit®, Opt + ® and Revolve Finance®. With over 20 years of operating experience, CURO offers financial freedom to unprivileged consumers.