Pawn store operator FirstCash Inc said on Thursday it will acquire financial technology firm American First Finance Inc (AFF) in a US$1.17 billion deal, to enter the buy-now-pay-later business.
FirstCash is also looking to expand its footprint in the retail point-of-sale (POS) payments market, where AFF currently hosts over 6,500 merchant partner stores and e-commerce platforms across the United States.
AFF, founded in 2013, is a technology driven POS payments platform which offers consumers payment flexibility across marketplaces with its "no credit required" options.
With COVID-related lockdowns turning shoppers to online payment platforms, demand for financial technology companies has boomed and dealmaking has continued at a frenetic pace, with venture capital firms pouring money into such companies and fintech behemoths like PayPal and Square Inc expanding into the BNPL sector through acquisitions.
The cash-and-stock deal will also help FirstCash introduce flexible payment solutions in its pawn stores, it said.
Under the agreement, AFF would receive up to US$300 million more if it meets certain performance targets through the first half of 2023.
As part of the deal, FirstCash will form a new parent company, which will assume FirstCash's listing on the Nasdaq and maintain the "FCFS" ticker symbol.
At deal close, expected towards late 2021 or first quarter of 2022, AFF will operate as a separate Dallas-based business unit within FirstCash led by Howard Hambleton, AFF's president and chief executive officer.
(Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Shailesh Kuber)