The Aaron's Company Enters into Definitive Agreement to Be Acquired by IQVentures for $10.10 Per Share
The Aaron's Company announced a definitive agreement to be acquired by IQVentures Holdings for $10.10 per share in cash, valuing the company at approximately $504 million. This price represents a 34.0% premium over Aaron's closing share price on June 14, 2024, and a 35.6% premium over the 90-day volume-weighted average share price.
The transaction, approved by Aaron's Board of Directors, is expected to close by year-end, pending shareholder and regulatory approval. Post-acquisition, Aaron's will become a privately held company, delisting from NYSE, but continue operating under its existing brand and maintaining its headquarters in Atlanta, GA.
- Acquisition price of $10.10 per share offers a 34.0% premium over the closing share price on June 14, 2024.
- The transaction values Aaron's at approximately $504 million.
- The deal provides an immediate and significant value to shareholders.
- The acquisition is backed by a leading fintech organization, IQVentures, known for value creation and customer management.
- The deal is expected to close by the end of the year, providing timely execution.
- Following the acquisition, Aaron's will benefit from enhanced resources and expertise to achieve its long-term potential.
- Completion of the transaction is subject to shareholder and regulatory approval, introducing potential uncertainties.
- Upon acquisition, Aaron's will become a privately held company, resulting in delisting from NYSE and loss of public trading status.
- The transaction is not subject to a financing condition, but other customary closing conditions may pose risks.
Insights
The acquisition of The Aaron's Company by IQVentures for $10.10 per share, representing a
For investors, the move to take the company private means they will no longer be able to trade Aaron's shares on the NYSE. This could limit future opportunities to benefit from potential long-term growth. However, in the short term, the guaranteed premium provides a solid exit point, especially for those who might have concerns about the company’s future performance in a tough market.
One thing to note is that the transaction isn't subject to a financing condition, which reduces the risk of the deal falling through due to financial issues. The involvement of reputable financial and legal advisors like J.P. Morgan and Jones Day also adds credibility to the transaction.
Retail investors should consider the certainty of the premium payout against the potential long-term benefits of holding the stock if it remained public. The overall offer appears fair and generous given current market conditions.
From a market perspective, the acquisition underscores the growing influence of fintech companies like IQVentures in traditional retail sectors. The emphasis on leveraging IQVentures' resources and expertise to accelerate Aaron's omni-channel strategy and operational efficiency is noteworthy. It highlights a trend where technology and financial solutions are increasingly pivotal in transforming traditional retail models.
For investors, this merger indicates a strategic pivot for The Aaron's Company, aiming to enhance customer experiences through technology. It’s important to monitor how effectively IQVentures can integrate its fintech solutions with Aaron's existing operations. This merger could set a precedent for similar deals in the industry, where fintech firms acquire retail companies to streamline operations and enhance customer service.
Although the transition to a private company means losing public trading visibility, the promise of enhanced operational capabilities might lead to improved long-term performance. The retained brand identity and headquarters signify that changes will be more operational than structural, potentially resulting in a smoother transition.
From a legal standpoint, the transaction will be closely scrutinized by regulatory authorities and shareholders. The unanimous approval by The Aaron's Company's Board of Directors suggests robust internal agreement on the benefits of the acquisition, which is a positive signal for regulatory approval. However, investor attention should be directed towards the completion conditions, including shareholder and regulatory approvals, which could introduce delay risks.
The transition to a privately held entity alters the company's compliance and reporting obligations, which can streamline operations but also reduces transparency for investors. This move often appeals to companies seeking to make strategic changes without the pressure of quarterly public disclosures.
Investors should review the terms filed in the Current Report on Form 8-K for detailed conditions and regulatory implications. Understanding these elements can provide insight into potential hurdles and the timeline for the transaction's completion.
Transaction Represents
"We are pleased to announce this transaction with IQVentures, which delivers significant and immediate value to our shareholders," said John W. Robinson III, Chairman of the Board of The Aaron's Company. "While we have performed well in a challenging operating environment, our Board has consistently evaluated the Company's standalone plan against other strategic opportunities, including recently engaging with a range of potential partners. With the assistance of our financial and legal advisors, the Board conducted a thorough review of our strategic options and ultimately determined that a sale to IQVentures represented the best way to maximize shareholder value."
"We believe that IQVentures' resources and financial services expertise will help the Company achieve its long-term potential," said Douglas Lindsay, Chief Executive Officer of The Aaron's Company. "Together with IQVentures, The Aaron's Company will be better positioned to accelerate its omni-channel strategy and operational efficiency initiatives, all while continuing to enhance our customers' lives by providing easy access to high quality products through affordable lease and retail purchase options."
IQVentures is a proven fintech leader that provides intelligent, market-driven solutions built on the latest emerging technologies and beneficial shared services for the entities it acquires. IQVentures has a demonstrated track record of value creation, and expertise in customer management, with a deep understanding of The Aaron's Company's core customer base.
IQVentures President Cory Miller stated, "We admire The Aaron's Company's industry-leading position, and we look forward to applying our knowledge and resources to better serve its customers. Douglas and his team have transformed the Company over the past few years, and we are excited to build on that transformation and work together to continue evolving and growing the business."
Transaction Details
The transaction was unanimously approved by the Board of Directors of The Aaron's Company and is expected to close by the end of the year, subject to shareholder approval, regulatory approval and other customary closing conditions. The transaction is not subject to a financing condition.
Upon completion of the transaction, The Aaron's Company will become a privately held company, and its common stock will no longer be traded on NYSE.
Following the closing of the transaction, it is expected that The Aaron's Company will continue to operate under its existing brand names and will maintain its headquarters in
For further information regarding the terms and conditions contained in the definitive transaction agreement, please see The Aaron's Company's Current Report on Form 8-K, which will be filed with the U.S. Securities and Exchange Commission in connection with the announcement of the transaction.
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
About IQVentures
Headquartered in the
Forward-Looking Statements
Statements in this news release that are not historical facts are "forward-looking statements" that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements 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 risks and uncertainties include factors such as (i) the ability to obtain regulatory approval and meet other closing conditions to the proposed transaction, including shareholder approval; (ii) the ability of IQVentures to obtain financing for the proposed transaction; (iii) 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; (iv) litigation relating to the proposed transaction; (v) the inability to retain key personnel, or potential diminished productivity due to the impact of the proposed transaction on the Company's current and prospective employees, key management, customers, suppliers, franchisees and business partners; and (vi) the other risks and uncertainties discussed under "Risk Factors" in the Company's most recent Annual Report on Form 10-K and in other documents that the Company files from time to time with the SEC. Statements in this news release that are "forward-looking" include without limitation statements about IQVentures' proposed transaction to acquire the Company (including the anticipated benefits, results, effects and timing of the proposed transaction). 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 Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the date of this news release.
Additional Information and Where To Find It
This communication may be deemed to be solicitation material in respect of the transaction between the Company and IQVentures. The Company expects to announce a special meeting of shareholders as soon as practicable to obtain shareholder approval of the transaction. In connection with the transaction, the Company intends to file relevant materials with the SEC, including a proxy statement in preliminary and definitive form. INVESTORS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE TRANSACTION. Investors may obtain a free copy of these materials (when they are available) and other documents filed by the Company with the SEC at the SEC's website at www.sec.gov, at the Company's website at www.aarons.com or by sending a written request to the Company in care of the Corporate Secretary, at The Aaron's Company, Inc., 400 Galleria Parkway, S.E., Suite 300,
Participants in the Merger Solicitation
The Company and certain of its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the special meeting of shareholders. Information regarding the Company's directors and executive officers is available in the Company's proxy statement filed with the SEC on March 21, 2024 in connection with its 2024 annual meeting of shareholders. Other information regarding persons who may be deemed participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the definitive proxy statement related to the proposed transaction and other relevant materials to be filed with the SEC when they become available.
Aaron's Investor Relations Contact:
InvestorRelations@aarons.com
Phone: 678-402-3590
Aaron's Media Relations Contact:
MediaRelations@aarons.com
Phone: 678-402-3591
FGS Global
Jim Barron / Jamie Baird / Danielle Berg
aarons@fgsglobal.com
IQVentures Media Relations Contact:
Phone: 888-983-4478
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SOURCE The Aaron's Company, Inc.
FAQ
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