Rent-A-Center said Monday it had agreed to sell itself to Vintage Capital in a deal valued at $1.365 billion that adds another rent-to-own furniture company to the private-equity firm’s portfolio.

The announcement of the take-private deal came only a week after Rent-A-Center said it had concluded a strategic review process without receiving any satisfactory acquisition proposals.

Vintage, which originally offered $13 per share for Rent-A-Center last fall, made a $14-per-share proposal on June 12. Rent-A-Center said Monday its board had unanimously accepted an improved $15-per-share offer that represents a premium of 25% to the stock’s Friday close.

The board “is confident [the proposal] maximizes value for stockholders while delivering a significant and immediate cash premium,” CEO Mitch Fadel said in a news release.

“Vintage is a natural partner for Rent-A-Center given its deep knowledge of the rent-to-own industry, and we look forward to partnering with them to realize the full benefits of the transaction,” he added.

The Future of Finance Has Arrived

The pace with which finance functions are employing automation and advanced technologies is quickening. Rapidly. A new survey of senior finance executives by Grant Thornton and CFO Research revealed that, for just about every key finance discipline, the use of advanced technologies has increased dramatically in the past 12 months.

Read More

Rent-A-Center had been under pressure from activist investor Engaged Capital, which started pushing for a sale in 2016. After a proxy fight, shareholders voted in three Engaged nominees as board members last year.

Vintage is already the controlling shareholder of Buddy’s Home Furnishings, a fast-growing Florida-based competitor of Rent-A-Center that is the third largest U.S. rent-to-own chain with 330 stores, mostly in the South.

“We believe that the combination of Rent-A-Center, Buddy’s, and Vintage is a compelling opportunity to utilize our resources and expertise to enhance value and create a leader in the rent-to-own industry,” said Brian R. Kahn, managing member and founder of Vintage.

Rent-A-Center has been struggling with declining sales, losing its No. 1 spot in rent-to-own retail to Aaron’s in 2016. Over the past year, it closed 166 stores and now operates 2,287 U.S. stores and 123 stores in Mexico.

In trading Monday, Rent-A-Center shares jumped 22.5% to $14.75.

, , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *