IQVentures To Complete Acquisition of The Aaron's Company

Rhea-AI Summary

The Aaron's Company, Inc. (NYSE: AAN) and IQVentures Holdings, have announced the expected completion of their previously announced acquisition later today. The acquisition, initially revealed on June 17, 2024, received shareholder approval on September 25, 2024. Upon finalizing the transaction, The Aaron's Company's common stock will cease trading and be delisted from the NYSE.

J.P. Morgan Securities is acting as the exclusive financial advisor to The Aaron's Company, with Jones Day serving as legal counsel. For IQVentures, Stephens Inc. is the exclusive financial advisor, and King & Spalding LLP is providing legal counsel.

Positive

• Acquisition approved by The Aaron's Company shareholders
• Timely completion of the acquisition process

Negative

• Delisting of The Aaron's Company's common stock from NYSE

Insights

Financial Analyst

The acquisition of The Aaron's Company by IQVentures marks a significant milestone in the lease-to-own retail sector. This $1.1 billion all-cash transaction, announced in June, values Aaron's at $21 per share, representing a 36% premium to its closing price before the announcement.

The deal's completion will result in Aaron's becoming a private company, which could allow for more flexibility in long-term strategic decisions without the pressure of quarterly earnings reports. However, it also means reduced transparency for former public shareholders and potential changes in corporate strategy.

For the broader market, this acquisition reflects ongoing consolidation in the retail sector, particularly in the rent-to-own space. It may signal potential for similar deals in the future, as private equity firms seek opportunities in the evolving retail landscape.

Investors should watch for potential impacts on competitors like Rent-A-Center (RCII) and any shifts in the competitive dynamics of the industry following this privatization.

Market Research Analyst

The acquisition of Aaron's by IQVentures is a strategic move that could reshape the lease-to-own market. Aaron's has been facing challenges in recent years, including increased competition from e-commerce and changing consumer preferences. Going private may allow the company to undergo necessary restructuring and innovation without the scrutiny of public markets.

Key points to consider:

• Market consolidation: This deal reduces the number of major players in the lease-to-own space, potentially leading to less competition and higher pricing power for remaining firms.
• Operational changes: IQVentures may implement cost-cutting measures and operational efficiencies to improve profitability.
• Digital transformation: Expect accelerated investment in e-commerce and digital platforms to compete with online-only retailers.
• Geographic expansion: The new ownership might pursue aggressive growth strategies in untapped markets.

This acquisition could be a bellwether for similar deals in the retail sector, particularly for companies struggling with the transition to omnichannel retailing and changing consumer behaviors.

ATLANTA, Oct. 3, 2024 /PRNewswire/ -- The Aaron's Company, Inc. ("The Aaron's Company" or "Aaron's") (NYSE: AAN) and IQVentures Holdings, LLC ("IQVentures") today announced that they expect to complete the previously announced acquisition by IQVentures of The Aaron's Company later today. The acquisition was originally announced on June 17, 2024, and approved by The Aaron's Company shareholders on September 25, 2024. Upon completion of the transaction, The Aaron's Company's common stock will cease trading and will no longer be listed on the NYSE.

Advisors

J.P. Morgan Securities LLC is serving as exclusive financial advisor to The Aaron's Company, and Jones Day is serving as legal counsel. Stephens Inc. is serving as exclusive financial advisor to IQVentures, and King & Spalding LLP is serving as legal counsel.

About The Aaron's Company, Inc.

Headquartered in Atlanta, The Aaron's Company, Inc. is a leading, technology-enabled, omnichannel provider of lease-to-own and retail purchase solutions of appliances, electronics, furniture, and other home goods across its brands: Aaron's, BrandsMart U.S.A., BrandsMart Leasing, and Woodhaven. Aaron's offers a direct-to-consumer lease-to-own solution through its approximately 1,210 Company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform. BrandsMart U.S.A. is one of the leading appliance retailers in the country with 12 retail stores in Florida and Georgia, as well as its e-commerce platform. BrandsMart Leasing offers lease-to-own solutions to customers of BrandsMart U.S.A. Woodhaven is the Company's furniture manufacturing division. For more information, visit investor.aarons.com, aarons.com, and brandsmartusa.com.

About IQVentures

Headquartered in the Columbus, Ohio metropolitan area, IQVentures invests in and builds the next generation of technology and companies that help shape the future. IQVentures has substantial experience and expertise in all aspects of consumer and business financing and leverages proprietary technology and shared services to help drive value for the companies it acquires. For more information, please visit www.iqventures.com.

Forward Looking Statements

This news release contains forward-looking statements, including statements regarding the proposed acquisition by IQVentures of The Aaron's Company and the expected closing date of such acquisition. Forward-looking statements are all statements other than those of historical fact, and generally can be identified by the use of forward-looking terminology, such as "believe," "expect," "expectation," "anticipate," "may," "could," "should," "intend," "seek," "estimate," "plan," "target," "project," "likely," "will," "forecast," "future," "outlook," or other similar words, phrases, or expressions. These forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include (i) the ability of IQVentures to obtain financing for the proposed transaction; (ii) potential adverse reactions or changes to business relationships resulting from the announcement, pendency or inability to complete the proposed transaction on the expected timeframe or at all; (iii) litigation relating to the proposed transaction; (iv) the inability to retain key personnel, or potential diminished productivity due to the impact of the proposed transaction on The Aaron's Company's current and prospective employees, key management, customers, suppliers, franchisees and business partners; and (v) the other risks and uncertainties discussed under "Risk Factors" in The Aaron's Company's most recent Annual Report on Form 10-K and in other documents that The Aaron's Company files from time to time with the SEC. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Except as required by law, the parties undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the date of this news release.

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SOURCE The Aaron's Company, Inc.

FAQ

When was the acquisition of The Aaron's Company by IQVentures announced?

The acquisition of The Aaron's Company (AAN) by IQVentures was originally announced on June 17, 2024.

When did The Aaron's Company shareholders approve the acquisition?

The Aaron's Company (AAN) shareholders approved the acquisition by IQVentures on September 25, 2024.

What will happen to The Aaron's Company's stock after the acquisition?

Upon completion of the acquisition, The Aaron's Company's (AAN) common stock will cease trading and will no longer be listed on the NYSE.

Who are the financial advisors for The Aaron's Company and IQVentures in this acquisition?

J.P. Morgan Securities is the exclusive financial advisor for The Aaron's Company (AAN), while Stephens Inc. is serving as the exclusive financial advisor for IQVentures.