CURO Group Holdings Corp. (NYSE:CURO) entered into a definitive agreement to acquire Heights Finance Corporation from Southern Management Corporation for $360 million on November 17, 2021. Under the terms of agreement, CURO Group is paying total consideration of $360 million which is comprised of $335 million cash and $25 million of CURO common stock. CURO expects to fund the acquisition through a combination of existing cash and debt. The company announced that its wholly-owned subsidiary, CURO Finance, LLC intends to offer $225 million in aggregate principal amount of senior unsecured notes due 2029 in a private placement to qualified institutional buyers. The net proceeds from the sale of the notes, together with cash on hand, will be used to finance the Heights Finance acquisition and to pay fees and expenses related to this offering and the Heights Finance acquisition. At the closing of the Acquisition, $10 million of cash consideration and $20 million of the stock consideration to be issued to Seller will be placed into escrow to cover certain indemnification obligations of the Seller under the terms of the Purchase Agreement, although there is no assurance that any actual liability incurred by the Company will not exceed amounts recoverable from such escrow.

The acquisition's aggregate purchase price of $360 million represents 6.5x Heights Finance's 2022 estimated adjusted earnings before taxes of $55 million. For the 12 months ended September 30, 2021, Heights Finance had revenue of $235 million, net income of $22.634 million, total assets of $500.852 million, total stockholder's equity of $112.79 million, and EBITDA of $61.582 million. The transaction is subject to customary closing conditions, including licensing approvals and has been approved by CURO's Board of Directors and receipt of certain regulatory approvals and licenses. The transaction is expected to close no later than the first quarter of 2022. The acquisition is immediately accretive to CURO's earnings and the acquisition is expected to accelerate CURO's transition into longer-term, higher balance and lower rate credit products. Jefferies LLC served as exclusive financial advisor and Timothy M. Fesenmyer and William C. Smith III (Cal) of King & Spalding LLP served as legal counsel to CURO in this transaction. Bruce K. Fenton and Donald R. Readlinger of Troutman Pepper served as legal counsel to Heights Finance in this transaction.

CURO Group Holdings Corp. (NYSE:CURO) completed the acquisition of Heights Finance Corporation from Southern Management Corporation on December 27, 2021.