Cash America International announced Wednesday that it’s exiting the Mexican market as it continues to refocus on its core pawn business in the United States.
The Fort Worth-based company has sold 47 locations in Mexico and five stores in Colorado to Arlington-based First Cash Financial Services. The transaction was disclosed in separate releases from the two companies.
First Cash said it also picked up an additional four pawn stores in Texas from an undisclosed seller. It reported a combined purchase price for all of the stores at approximately $28.5 million.
Daniel R. Feehan, Cash America’s chief executive, said the decision to exit the “nonstrategic” markets follows the addition of pawn locations in its most important markets in the U.S.
“Over the last two years, Cash America has added 132 pawn lending locations primarily through acquisitions. The addition of this group of pawn locations expanded our presence in strategically important markets for our business, including Texas, Georgia, Tennessee and North Carolina,” Feehan said.
“The decision to exit the nonstrategic markets of Mexico and Colorado will allow us to focus our resources and efforts on driving growth and enhancing the customer service in our overall network of coast-to-coast locations in the United States,” he said.
Cash America entered the Mexican market in 2008 when it acquired a large chain of jewelry-only pawnshops and expanded before scaling back in 2012, when it announced plans to close 150 stores there.
Rick Wessel, chief executive of First Cash, said the acquisitions will bring it to more than 980 stores in 28 states in Mexico and 12 states in the U.S.
“We are particularly excited about the 47 stores acquired in Mexico, all of which are full-service locations,” he said. “Including this acquisition, we anticipate adding a total of 85 to 90 stores in Mexico in 2014, significantly exceeding our original 2014 store opening target in Mexico of 65 to 70 stores.”
Cash America shares (ticker: CSH) closed down 31 cents at $45 on Wednesday while First Cash (ticker: FCFS) gained $2.13 to $58.77.
Following the sale, Cash America will operate 864 lending locations in 21 states with $256.5 million in pawn loan balances. As of June 30, it also had 88 check-cashing centers and offered payday loans online through its Enova International subsidiary in the U.S., United Kingdom, Australia, Canada and Brazil.
Last month, the company filed registration documents with the Securities and Exchange Commission to spin off 80 percent of Enova to shareholders. Also, Feehan announced that he plans to step down as president and CEO on April 30, 2015, after leading Cash America for more than a decade. He will become chairman of the board.
This article includes material from Star-Telegram archives.