DFC Global Corp (NASDAQ:DLLR) Agrees To Go Private
DFC Global Corp (NASDAQ:DLLR) jumped up sharply yesterday after the credit services firm disclosed that it has signed an agreement to be acquired by private equity firm Lone Star Funds for a sum consideration of $1.3 billion. The Berwyn based alternative financial services provider followed up this announcement with a preview of its 3Q14 operational results in which it reported likely loss per share of 4 cents. In addition it also provided a subdued guidance for full fiscal 2014 operations.
The Sale Agreement Details
DFC Global Corp (NASDAQ:DLLR) which traces back its operations to 1980’s has agreed to be bought out and operate as a private firm, in exchange of $9.5 per share, in cash to common share holders. The price translates into a 5.8 percent premium on its previous day’s closing price. Lone Star Funds will take on to its books all the accumulated debt that has been accumulated by DFC. The agreement will have to be approved by the company’s share holders and is expected to close in 3Q of 2014.
Law Firms To Investigate
While investors rejoiced the premium pricing on the stock a whole host of law firms working on behalf of share holders announced that they would be investigating the process and the mechanism followed by the board of directors of DFC Global Corp (NASDAQ:DLLR) led by its Chairman of the Board and Chief Executive Officer Jeffrey A. Weiss to arrive at the pricing for the sale. The investigations will also look into the possible undervaluation of the current sale price.
Preliminary 3Q14 Results and FY14 Guidance
Revenue for reporting quarter, 3Q14 is expected to come in the range of $248.0 to $252.0 million. For the fiscal 2014, the firm reduced its EBITDA guidance. It expects EBITDA to come in range of $151 to $156 million, as against previously estimated $170 to $200 million.