PROG Holdings, Inc. Announces Intention to Purchase up to $425 Million of Common Stock in Modified Dutch Auction Tender Offer

PROG Holdings intends to commence the tender offer , New York City time, at the end of the day , unless the tender offer is extended or earlier terminated. The tender offer is expected to be funded through a combination of cash on hand, borrowings under its existing revolving facility, and/or new debt.

“Our decision to purchase approximately 15% of our outstanding shares of common stock through a tender offer is the next step in the evolution of our capital allocation strategy, which includes as one of its primary objectives returning capital to our shareholders. The cash generating ability of our high-growth, asset-light business model presents multiple opportunities to deploy capital and optimize our balance sheet to enhance shareholder value,” said PROG Holdings President and CEO Steve Michaels. “We believe this decision to modestly leverage our strong balance sheet to purchase shares during favorable market conditions will lower our cost of capital without impacting our ability to continue investing in organic growth and attractive M&A opportunities, and to potentially return excess cash to shareholders in other ways.”

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The tender offer is being launched as part of a newly authorized $1 billion share repurchase program, which replaces PROG Holdings’ prior $300 million program. Under the new authorization, purchases can be made from time to time using a variety of methods, which may include tender offers, open market purchases, purchases effected through 10b5-1 trading plans accelerated share repurchase programs or other transactions. The amount of any shares of PROG Holdings’ common stock that are purchased under the new repurchase program and the timing of any such purchases will be determined based on market conditions and other factors, and the program may be suspended or discontinued at any time.

A “modified Dutch auction” tender offer allows shareholders to indicate how many shares of common stock and at what price within the range described above they wish to tender their shares. Based on the number of shares tendered and the prices specified by the tendering shareholders, PROG Holdings will determine the lowest price per share within the specified range that will enable PROG Holdings to purchase shares having an aggregate purchase price of up to $425 million, or such lesser amount of shares of common stock that are properly tendered and not properly withdrawn prior to the expiration date of the tender offer. In addition, if shares having an aggregate purchase price of more than $425 million are tendered in the tender offer and not properly withdrawn, PROG Holdings reserves the right to accept for purchase at the purchase price pursuant to the tender offer up to an additional 2% of its outstanding shares without amending or extending the tender offer. PROG Holdings will also have the right, in its sole discretion, to purchase additional shares subject to applicable legal and regulatory requirements.

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While PROG Holdings’ Board of Directors has authorized PROG Holdings to make the tender offer, neither PROG Holdings nor its Board of Directors makes any recommendation as to whether any shareholder should participate or refrain from participating in the tender offer or as to the purchase price or purchase prices at which shareholders may choose to tender their shares in the tender offer. PROG Holdings has not authorized any person to make any such recommendation. Shareholders must decide whether to tender their shares of common stock and, if so, how many shares to tender and at what price or prices to tender. In doing so, shareholders should carefully evaluate all of the information in the tender offer documents, when available, before making any decision with respect to the tender offer and should consult their own broker or other financial, legal, and tax advisors.