Yesterday, Dollar Financial Corp. (DLLR) announced the completion of its acquisition of Finnish internet loan provider Risicum Oyj for $46 million. This move is in sync with Dollar’s strategy to grow its global internet lending business.
Dollar Financial is already a leading pawn lender in Scandinavia. With the acquisition of the Risicum technology and products, which are suitable for the Scandinavian and Baltic region, the company further expands and fortifies its presence in Finland and Sweden.
Dollar intends to tap the fast-growing underbanked and unbanked consumers, whom it refers to as ALICE or asset constrained, limited income, employed people. Moreover, it is targeting these customers by e-commerce technology rather than investing in physical stores, thereby saving unnecessary expenses and ensuring quick online transactions for customers.
In an effort to further diversify its global footprint, product set and sales channel strategies, Dollar completed a number of key acquisitions in fiscal 2010. These include the acquisition of a leading pawn-lending Scandinavian company, Sefina Finance AB, for approximately $73 million in cash in December 2010, the acquisition of Swedish Internet lending business Folkia Group AS for $28 million in August 2010, and the acquisition of Suttons & Robertsons, the fourth-largest pawn-broking business in the UK, for £15 million in April 2010. The acquisitions are expected to provide the next generation of growth for the company.
In April 2011, Dollar Financial U.K. Ltd., Dollar’s wholly-owned U.K. subsidiary, completed the acquisition of Purpose U.K. Holdings Limited for $195 million.
Dollar’s 2009 acquisitions included Optima, S.A., a door stop lending business in Poland, Merchant Cash Express business, and Dealer’s Financial Services, which provides fee-based auto lending and insurance services to military personnel in the United States.
As a result of the company’s successful acquisition and product development strategy, revenue generated from new products and geographies acquired or developed over the last two years accounted for approximately 17.0% of the total consolidated revenue for fourth quarter 2010 and 22.0% of total adjusted EBITDA.
Dollar’s active acquisition strategy over the past couple of years reflects its aggressiveness to expand globally. The company has a robust pipe-line of global acquisition candidates, along with considerable investible cash and a new long-term debt structure that provides the needed flexibility to act on such opportunities.
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