Tue, 11 Jul 2023 | BUSINESS SALE
Second-hand retailer and sub-prime lender Cash Converters International has acquired its largest franchise group, Capital Cash, in a £13.9 million deal. The deal is a 6.3x multiple of Capital Cash’s pre-tax profits of £2.2 million for the year ending September 30 2022.
Capital Cash, which has been trading in the UK for 20 years, operates 42 of Cash Converters’ 188 UK stores. The company provides pawnbroking, buyback and retailing of second-hand goods, with the acquisition providing Cash Converters with a significant UK corporate store footprint and experienced UK management team.
The company has seen strong growth over recent years, recovering from the initial impact of COVID-19 to record revenue of £36.1 million in the year to September 30 2022, up from £21.1 million a year earlier, an increase of 70.9 per cent. At the time of those accounts, Capital Cash’s fixed assets were valued at £647,062 and current assets at close to £11.1 million, with net assets standing at £5.5 million.
Commenting on the deal, Cash Converters Managing Director Sam Budiselik said: "We continue to assess opportunities to invest our capital sensibly, to generate value for our shareholders.”
“We are particularly excited to announce an agreement on terms to acquire the largest Cash Converters franchise store network in the UK and to integrate a proven management team into our corporate operation."
The deal will see Capital Cash Managing Director Carl Murray take on the role of Chief Executive at Cash Converters UK. In this role, Murray will be tasked with leading Cash Converters’ UK growth objectives, including plans to acquire further franchise stores.
Find out why post-deal integration is the most important stage of M&A.
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