Rent-A-Center Buys Online Competitor Merchants Preferred for $47.5 Million

Plano-based Rent-A-Center said Monday that it's paying $47.5 million in cash and stock to buy an Atlanta-based company that competes with its own furniture and appliance financing division Acceptance Now.Merchants Preferred was founded in 2012 and offers online rent-to-own services to customers with bad credit or to those who don't have bank accounts. Customers fill out their credit applications online. Then select from stores in each city that are partners with Merchants Preferred to shop for their rent-to-own furniture.The acquisition come less than three months after Rent-A-Center received $92.5 million as part of an agreement to end litigations over its surprise termination last year of its pending and shareholder approved merger with Vintage Capital.The transaction will add 2,500 stores where Rent-A-Center's customers can shop beyond its own 2,200 Rent-A-Center stores in the U.S., Mexico and Puerto Rico and the 1,100 Acceptance now kiosks in Ashley Furniture, Rooms to Go, Value City Furniture and others.Joe Corona, CEO of Merchants Preferred, said their technology is "very complementary to the Acceptance Now business model."Rent-A-Center will pay $28 million in cash and at least 701,918 shares of Rent-A-Center stock, based on Friday's closing price of $27.83 a share. The transaction is expected to close in the third quarter."This acquisition positions us for growth and differentiates us from competitors, allowing us to offer both virtual and staffed solutions to our retail partners," said Mitch Fadel, Rent-A-Center's CEO, in a statement.Twitter: @MariaHalkias  Continue reading...

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