Cash Converters spends $4m for five stores

Cash Converters has acquired four franchised stores in Victoria and one in New South Wales for approximately $4 million dollars, inclusive of $1.8 million in assets, bringing the total number of corporate-owned stores in Australia to 61.

The price represents an earnings before interest and tax multiple of 4 on adjusted current earnings, and an EBIT multiple of 2.2 times excluding acquired assets.

The consideration will be paid out of company cash reserves and existing financial facilities, with settlement of the acquisition occuring in mid-January 2014.

In March, the company bought eight franchised stores in Adelaide and acquired two in the United Kingdom and one in Perth, for a total cash consideration of $32.6 million, inclusive of $6.9 million in assets.

It now has 124 stores in Australia and the UK combined.

The company says it is continuing to review opportunities to acquire further stores and increase its distribution network for its financial services products.

In September, Cash Converters exercised its right to convert a $4 million dollar loan into an 80 per cent equity in Green Light Auto Group – trading as Carboodle - a company born in 2010 that provides customers who don’t have access to mainstream credit with reliable and maintained cars on four-year lease terms.

More recently in November, 27 per cent of voting shareholders opposed the company’s remuneration report, giving them a first strike.

Shares in Cash Converters are up 1 cent, trading at 79 cents per share, as of 11.45am, WST.