Pawn store operator FirstCash has brokered a $1.17bn deal to buy fintech firm American First Finance (AFF), in a move to foray into the buy-now-pay-later (BNPL) segment.
The deal consideration includes nearly 8.05 million FirstCash shares and $406m cash.
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FirstCash also agreed to pay an additional consideration of $300m if AFF fulfils certain performance targets through the first half of 2023.
The deal awaits regulatory approvals, with completion expected by the end of this year or early next year.
Founded in 2013, AFF offers POS payment solutions to retail customers in the US. It currently serves over 6,500 merchant partner stores and e-commerce platforms across the country.
In addition to its expansion into the $600bn BNPL space, AFF will enable FirstCash to tap into the retail POS payments market.
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By GlobalDataFirstCash CEO Rick Wessel said: “With the tremendous growth in the retail POS finance and buy now pay later space, AFF is an ideal partner for FirstCash, bringing a highly profitable and scaled platform with industry leading LTO and retail finance capabilities, a large and highly reputable merchant base and an experienced management team.
“Working with AFF, we believe we are well positioned to drive further expansion in this large and growing addressable market.”
Wessel stated that FirstCash would leverage the AFF platform to bring additional payment options to it chain of pawn stores.
AFF’s LTO platform is expected to enlarge options for customers by enabling them to take home leased merchandise immediately.
Additionally, the firm plans to explore opportunities for potential LTO and retail finance products in Latin America.
Commenting on the deal, AFF founder and chairman Doug Rippel said: “FirstCash shares our vision of providing retail financing alternatives to underserved customers, and with its strong operational track record, we are confident that AFF will be even better positioned to grow its customer and merchant base and continue supporting their needs.”
Besides, FirstCash will set up a new parent company, which will assume FirstCash’s listing on the Nasdaq.
Following the close of the transaction, AFF will operate as an independent Dallas-based business unit within FirstCash. It will continue to be led by the current management team.
Rippel will join the board of directors of the new FirstCash parent company.
Last month, PayPal agreed to acquire Japanese BNPL services provider Paidy for nearly JPY300bn ($2.7bn).
