Vintage Capital Management’s affiliate Vintage Rodeo Parent agreed to acquire rent-to-own retailer Rent-A-Center. Vintage will acquire all of the outstanding shares of Rent-A-Center common stock for $15.00 per share in cash.
According to a related 8-K filing, B. Riley Financial and Guggenheim Corporate Funding signed a debt commitment letter for an $800 million senior secured term loan in support of the merger. The term loan will consist of a $400 million in aggregate principal first out term loan, a $250 million in aggregate principal second out term loan and a $150 million last out term loan in aggregate principal third out loan.
B. Riley also signed an equity commitment letter of up to $429 million to be provided to Vintage Rodeo at the closing of the merger.
The merger transaction 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. It represents a total consideration of approximately $1.365 billion, including net debt.
The Rent-A-Center board has unanimously approved the transaction and recommends that stockholders vote in favor of it. 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 unanimously supports this transaction and is confident it maximizes value for stockholders while delivering a significant and immediate cash premium,” said Mitch Fadel, CEO of Rent-A-Center.
JPMorgan Securities provided a fairness opinion to the Rent-A-Center board and acted as exclusive financial advisor to the company. Winston & Strawn served as the company’s legal advisor, while Sullivan & Cromwell served as legal advisor to the board.
B. Riley FBR served as financial advisor and lead arranger and Guggenheim Corporate Funding as administrative agent and joint lead arranger. Wilson Sonsini Goodrich & Rosati served as legal advisor to Vintage.
