Rent-A-Center to be Acquired by Vintage Capital

Rent-A-Center, Inc. recently announced that it has entered into a definitive agreement with Vintage Rodeo Parent, LLC, an affiliate of Vintage Capital Management, LLC, in which Vintage will acquire all of the outstanding shares of Rent-A-Center stock for $15.00 per share in cash. The transaction, which is not subject to a financing condition, and is expected to close by the end of 2018, subject to customary closing conditions including the receipt of stockholder and regulatory approvals, represents a total consideration of approximately $1.365 billion, including net debt.

Under the terms of the Merger Agreement, Rent-A-Center stockholders will receive $15.00 in cash for each share of Rent-A-Center common stock, which represents a premium of approximately 49 percent over the company’s closing stock price on October 30, 2017, immediately prior to the announcement that the company’s board of directors initiated a process to evaluate strategic and financial alternatives focused on maximizing stockholder value. The Rent-A-Center board has unanimously approved the transaction and recommends that stockholders vote in favor of the transaction. Upon completion of the transaction, Rent-A-Center will become a privately held company and its common shares will no longer be listed on any public market.

“The Rent-A-Center board, having just completed a comprehensive review of strategic and financial alternatives in consultation with outside legal and financial advisors, unanimously supports this transaction and is confident it maximizes value for stockholders while delivering a significant and immediate cash premium,” says Chief Executive Officer of Rent-A-Center Mitch Fadel. “The exciting announcement reflects the significant progress we have made to materially improve our performance and would not have been possible without the hard work and focus of our talented co-workers over the last several months. Vintage is a natural partner for Rent-A-Center given its deep knowledge of the rent-to-own industry, and we look forward to partnering with them to realize the full benefits of the transaction.”

“We have long admired Rent-A-Center and are pleased to have reached this agreement to expand our rent-to-own portfolio,” says Managing Member and Founder of Vintage Capital and Chairman of the Board of Members of Buddy’s Newco, LLC dba Buddy’s Home Furnishings Brian R. Kahn. “We believe that the combination of Rent-A-Center, Buddy’s and Vintage is a compelling opportunity to utilize our resources and expertise to enhance value and create a leader in the rent-to-own industry.”

J.P. Morgan Securities LLC is acting as the exclusive financial advisor to Rent-A-Center and provided a fairness opinion to the Rent-A-Center board of directors. Winston & Strawn LLP is serving as legal advisor to Rent-A-Center, and Sullivan & Cromwell LLP is serving as legal advisor to the Rent-A-Center Board of Directors.

Riley FBR, Inc. is serving as financial advisor and lead arranger and Guggenheim Corporate Funding LLC is serving as administrative agent and joint lead arranger. Wilson Sonsini Goodrich & Rosati, Professional Corporation is serving as legal advisor to Vintage.