THE AARON’S Firm TO Purchase BRANDSMART U.S.A., A Major REGIONAL Appliance AND ELECTRONICS RETAILER

ATLANTA, Feb. 23, 2022 /PRNewswire/ — The Aaron’s Enterprise, Inc. (“Aaron’s”) (NYSE: AAN), a top know-how-enabled, omnichannel provider of lease-to-individual and invest in options, these days declared that it has entered into a definitive agreement to acquire BrandsMart U.S.A. (“BrandsMart”). Below the phrases of the arrangement, total consideration is about $230 million in dollars, topic to certain closing adjustments, and the transaction is expected to shut in the second quarter of 2022. With this transaction, we consider that Aaron’s will supply over $3 billion in overall yearly revenues and above $300 million in altered EBITDA by calendar year-stop 2026.

Founded in 1977, BrandsMart is one particular of the primary appliance and buyer electronics vendors in the southeast United States and a person of the most significant equipment shops in the region with ten retailers in Florida and Ga and a expanding e-commerce existence on brandsmartusa.com. The firm presents finest-in-class pricing, a huge collection of makes, and hundreds of products and solutions, like significant and tiny appliances, client electronics, desktops, home furnishings and other house goods. BrandsMart’s value proposition has attracted a faithful and recurring purchaser foundation, resulting in profits, EBITDA, and no cost dollars circulation advancement. For the twelve months finished December 25, 2021, BrandsMart created revenues of $757 million and Modified EBITDA of $46 million.

“We are thrilled to announce our agreement to obtain BrandsMart, which we think strengthens Aaron’s capability to produce on our mission of maximizing people’s life by offering straightforward obtain to higher-high-quality solutions via inexpensive lease and retail purchase choices. The acquisition is envisioned to give meaningful value-creation possibilities, which incorporate leveraging Aaron’s lease-to-have know-how to offer BrandsMart prospects increased payment solutions and providing a huge variety of BrandsMart’s item assortment to millions of Aaron’s customers. Importantly, we imagine the acquisition of BrandsMart will increase our addressable market place and create an added platform for accelerated development,” explained Aaron’s CEO, Douglas Lindsay

“We are enthusiastic to welcome BrandsMart to the Aaron’s spouse and children. We seem forward to partnering with their seasoned administration crew to extend the BrandsMart footprint, and we feel that the consolidated small business can supply solid profits and double-digit annual altered EBITDA progress more than the upcoming 5 yrs and over and above,” Lindsay concluded.

BrandsMart’s President and Chief Govt Officer Michael Perlman reported, “I am very pleased to share the momentous information that BrandsMart is signing up for the Aaron’s household of corporations. BrandsMart has been aspect of my family members for around 45 several years, and I am very proud of our crew and the good results of the corporation we have developed jointly. I am confident that the put together group will gain from our complementary strengths and will provide growth prospects and even bigger value to our consumers, workforce and suppliers.” On closing of the transaction, the BrandsMart small business will report to Aaron’s President, Steve Olsen, and go on to be headquartered in Ft. Lauderdale, FL.

Powerful Strategic and Economical Advantages

  • Broadens Customer Get to and Considerably Expands Overall Addressable Market: This transaction is expected to outcome in a mixed entity with annual revenues in excess of $2.5 billion, 11,000 workers, and the capability to provide the whole spectrum of key and sub-prime buyers. Merged, we will leverage each firm’s capabilities and infrastructure to provide a exclusive customer value proposition that features a wide assortment of products and solutions, competitive pricing, and a wide range of funding and payment solutions. In addition, with leading model recognition in its Florida and Ga markets, BrandsMart gives retail outlet and omnichannel enlargement chances to capture added share in adjacent geographic locations.
  • Leverages Aaron’s Strengths to Create an In-Dwelling LTO Alternative: Aaron’s intends to use its existing know-how and belongings to supply an “in-house” lease-to-own solution to BrandsMart’s buyers. This solution will be supported by our proprietary centralized lease decisioning technology, purchaser service skills and last-mile reverse logistics abilities. The mix of our most effective-in-class abilities and wholesale paying for edge will permit us to deliver substantial acceptance prices, grow the lease-to-possess program obtainable to BrandsMart consumers, and seize incremental earnings.
  • Raises Product or service Assortment Accessible to Aaron’s Shoppers: Aaron’s expects to produce a foremost immediate-to-shopper lease-to-individual marketplace by giving Aaron’s shoppers obtain to substantially of BrandsMart’s in depth products catalog. This wide assortment of products, obtained at wholesale value, would increase Aaron’s existing worth proposition of low regular monthly payments, high acceptance rates, and greatest-in-course purchaser provider and is expected to deliver major revenue expansion prospects.
  • Yields Considerable Purchasing Electric power and Value Synergies: By leveraging Aaron’s and BrandsMart’s complementary merchandising capabilities and increased scale, we count on that the put together firm will produce important yearly solution procurement discounts about time.
  • Enhances Fiscal Profile and Delivers Considerable Earnings and Earnings Progress Chances: The transaction is expected to be accretive to 2022 Modified EBITDA and non-GAAP EPS. Aaron’s expects to sustain its present-day dividend coverage and carry on opportunistically repurchasing shares less than its present authorization. Aaron’s is fully commited to managing its equilibrium sheet conservatively to boost our fiscal flexibility.

Transaction Phrases and Financing
Underneath the conditions of the agreement, Aaron’s will receive 100% of the outstanding fairness interests of Interbond Company of America, which does company as BrandsMart U.S.A., from the Perlman family members for consideration at closing of $230 million in dollars, subject to selected article-closing adjustments. The transaction is meant to be funded by way of a mixture of cash on hand and financial debt financing.

In connection with the transaction, Aaron’s has secured a $200 million funding commitment from Truist Lender, Bank of America, N.A., JPMorgan Chase Lender, N.A. and Citizens Bank, N.A., every of which is a loan company in our current senior unsecured credit score facility. The financing commitment is expected to be structured as a time period financial loan, maturing on November 9, 2025, with an initial fascination amount of SOFR (Secured Right away Funding Charge) in addition 1.75%. 

Convention Contact and Webcast
Aaron’s will maintain a conference phone to discuss its quarterly results and the acquisition of BrandsMart on February 24, 2022, at 8:30 a.m. Jap Time. The general public is invited to listen to the meeting phone by webcast obtainable by Aaron’s trader relations website, trader.aarons.com. The webcast will be archived for playback at that exact site.

An investor presentation relevant to Aaron’s arrangement to purchase BrandsMart can be located on Aaron’s investor web-site at investor.aarons.com.

Advisors
BofA Securities, Inc. is performing as financial advisor to Aaron’s and Jones Day is acting as lawful advisor. Cassel Salpeter & Co., LLC is performing as economical advisor to BrandsMart and Cooley LLP is acting as authorized advisor.

About The Aaron’s Corporation
Headquartered in Atlanta, The Aaron’s Corporation, Inc. (NYSE: AAN) is a major omnichannel service provider of lease-to-have and buy alternatives. Aaron’s engages in immediate-to-consumer income and lease ownership of furnishings, household appliances, shopper electronics and equipment through its roughly 1,300 business-operated and franchised retailers in 47 states and Canada, as nicely as its e-commerce platform, Aarons.com. For additional information, pay a visit to Aarons.com or trader.aarons.com.  

About BrandsMart Usa
BrandsMart United states is a single of the leading appliance and purchaser electronics stores in the southeast United States and 1 of the most significant appliance retailers in the state with 10 retail suppliers in Florida and Georgia and a rising ecommerce existence at brandsmartusa.com. The firm presents hundreds of name brand names across hundreds of distinct things, including substantial and small appliances, customer electronics, desktops, furnishings, and residence products. For extra details, go to brandsmartusa.com.

Ahead-On the lookout Statements
Statements in this news release concerning our enterprise that are not historic points are “forward-on the lookout statements” that contain risks and uncertainties which could cause real outcomes to vary materially from these contained in the ahead-wanting statements. This sort of ahead-hunting statements generally can be discovered by the use of forward-hunting terminology, this kind of as “stay,” “believe,” “outlook,” “hope,” “assume,” “assumed,” and related terminology. These hazards and uncertainties involve factors this kind of as (i) any ongoing effects of the COVID-19 pandemic because of to new variants or efficacy and price of vaccinations, as effectively as associated steps taken by governmental or regulatory authorities to combat the pandemic (ii) the event of any function, change or other situation that could give rise to the termination of the obtain settlement associated to the proposed acquisition (iii) the risk that the required regulatory approvals might not be attained or might be received issue to problems that are not anticipated (iv) the possibility that the proposed acquisition will not be consummated in a timely manner or at all (v) risks that any of the closing circumstances to the proposed acquisition may well not be glad or could not be pleased in a well timed way (vi) hazards relevant to the disruption of management time from ongoing organization operations due to the proposed acquisition (vii) failure to notice the rewards expected from the proposed acquisition, together with projected synergies (viii) failure to instantly and correctly integrate the proposed acquisition (ix) the outcome of the announcement of the proposed acquisition on our running success and corporations and on the ability of Aaron’s and BrandsMart to keep and employ the service of important staff, manage interactions with suppliers (x) the threats related with our tactic and strategic priorities not staying effective, like our e-commerce and authentic estate repositioning and optimization initiatives or staying a lot more costly than expected (xi) our capability to regulate pricing to offset, or partially offset, inflationary pressure on the price of our goods and companies (xii) provide chain delays and disruptions, which includes adverse implications to our source chain operate from diminished procurement volumes and from the COVID-19 pandemic and (xiii) the other risks and uncertainties mentioned under “Risk Aspects” in the Firm’s Once-a-year Report on Form 10-K for the fiscal yr finished December 31, 2021 and any subsequent experiences submitted with the Securities and Exchange Fee. Statements in this push release that are “ahead-wanting” consist of devoid of limitation statements with respect to the Firm’s ambitions, options, expectations, projections concerning the envisioned positive aspects of the proposed acquisition, management’s options, projections and targets for the proposed acquisition, foreseeable future operations, scale and effectiveness, integration designs and predicted synergies therefrom, the timing of completion of the proposed acquisition, and our economical place, effects of functions, market posture, funds allocation tactic, initiatives, business strategy and expectations of our management subsequent the completion of the proposed acquisition. You are cautioned not to area undue reliance on these forward-on the lookout statements, which communicate only as of the date of this push release. Other than as demanded by legislation, the Firm undertakes no obligation to update these forward-seeking statements to reflect subsequent situations or situations immediately after the day of this press release.

Source The Aaron’s Enterprise, Inc.

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