Weeks after settling litigation related to a purchase deal, Rent-A-Center has entered into a definitive agreement to acquire substantially all of the assets of C/C Financial Corp., which does business as Merchants Preferred, a nationwide provider of virtual rent-to-own services.
Rent-A-Center has agreed in principle to settle all litigation with Vintage Capital Management, and B. Riley Financial relating to the company’s termination of an agreement and plan of merger last year with certain affiliates of Vintage Capital.
Rent-A-Center said that the company has terminated a previously announced merger agreement plan with certain affiliates of Vintage Capital Management, LLC.
In a special meeting on September 18, Rent-A-Center shareholders approved a merger deal with Vintage Rodeo, an affiliate of Vintage Capital Management, according to a filing with the United States Securities and Exchange Commission.
In the midst of an acquisition process, Rent-A-Center posted an earnings increase for its second quarter while its ongoing merger was questioned in court.
For the fourth quarter, and as it put in place a new strategic plan, Rent-A-Center posted net earnings and diluted earnings per share of $34.8 million and 65 cents versus a net loss and diluted loss per share of $146.4 million and $2.76 in the year-earlier period.
As the retailer posted a third quarter loss, the Rent-A-Center board of directors has initiated a process to explore strategic and financial alternatives.
Rent-A-Center has appointed Mark Speese to the CEO role and launched a new strategic plan developed to restore growth, improve profitability and maximize value by strengthening the core business in the United States while growing its AcceptanceNow business and leveraging technology investments.
Engaged Capital, an activist investing firm, has issued a letter to the Rent-A-Center board challenging the direction in which the management is taking the company, and Rent-A-Center has responded.
Although the company could not post GAAP net or per diluted per share loss as it determines income tax effects of goodwill impairment, Rent-A-Center reported that its fourth quarter loss before income taxes was $170.9 million versus $1.13 billion loss in the period a year prior including a $1.17 billion goodwill impairment charges taken in the core business segment in the United States.
Robert Davis has resigned as Rent-A-Center CEO and director effective immediately. Chairman Mark Speese, the company’s founder and former chief executive, will serve as interim CEO of the company until a permanent successor is named.
After encountering problems with a new point of sales system, Rent-A-Center pre-released selected preliminary, unaudited financial results for the quarter ended September 30 that includes a substantial sales decrease.