CURO Group Holdings Corp. (NYSE: CURO) (“CURO”), a market leader in providing credit to non-prime consumers, today announced it has entered into an agreement to acquire Flexiti Financial Inc. (“Flexiti”), an emerging growth Canadian POS/BNPL provider. Under the terms of the agreement, CURO will acquire Flexiti for cash at closing of $85 million. The transaction also includes contingent consideration of up to $36 million based on the achievement of risk-adjusted revenue and origination targets over the next two years.
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The acquisition of Flexiti further diversifies CURO’s revenue mix by product and geography and accesses the full spectrum of Canadian consumers by adding an established omni-channel private label credit card platform and POS financing capabilities. Flexiti primarily serves prime consumers and the combination presents significant revenue and earnings growth opportunities by using CURO’s expertise to expand Flexiti’s non-prime product offerings.
The transaction also provides the opportunity to leverage CURO’s loan servicing experience to improve Flexiti’s profit margins. The combination of CURO and Flexiti brings together two complementary businesses with like-minded management teams to serve prime and non-prime Canadian consumers directly or at the POS. In connection with the transaction, Flexiti refinanced and expanded its nonrecourse asset-backed warehouse financing facility from $296 million to $390 million.
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Flexiti, one of Canada’s fastest growing companies, is a privately-held POS lender headquartered in Toronto, offering customers flexible payment plans at retailers that sell goods such as furniture, appliances, jewelry and electronics. Flexiti is experiencing strong growth with originations increasing from C$49 million in 2017 to over C$290 million in 2020.
Through the company’s award-winning BNPL platform and proprietary technology, customers can be approved instantly to shop with their FlexitiCard, which they can use online or in-store to make multiple purchases, within their credit limit, without needing to reapply. In 2020, Flexiti was recognized by The Globe and Mail (Canada’s Fastest Growing Companies– ranked 6th), Canadian Business (Growth List – ranked 3rd), Deloitte (Technology Fast 50 TM – ranked 6th) and The Financial Times (The Americas’ Fastest Growing Companies – ranked 29th, 2nd in Canada).
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