3. Acquisitions and Divestitures

Acquisitions

Goodwill arising from the acquisitions discussed below consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn lending locations acquired. All goodwill associated with these acquisitions is expected to be deductible for tax purposes.

Acquisition of 34 Pawn Lending Locations in Georgia and North Carolina

In December 2013, the Company completed the acquisition of substantially all of the assets of a 34-store chain of pawn lending locations owned by PawnMart, Inc. that consisted of 31 locations in Georgia and three locations in North Carolina. The aggregate purchase price for the acquisition was $61.1 million, of which $0.5 million was paid in 2014. The acquisition price was paid in cash and funded by available cash and borrowings under the Company’s line of credit. The Company incurred $0.6 million of acquisition costs related to the acquisition, which were expensed.

The allocation of the purchase price for this acquisition is as follows (dollars in thousands):



Pawn loans	$	10,510
Merchandise acquired	3,695
Pawn loan fees and service charges receivable	1,639
Property and equipment	2,631
Goodwill	35,190
Intangible assets	6,834
Other assets	1,262
Other liabilities	(218		)
Customer deposits	(426		)
Net assets acquired	61,117
Cash consideration payable as of December 31, 2013	(500		)
Total consideration paid for acquisition, net of cash acquired, as of December 31, 2013	60,617
Cash paid in 2014 related to holdbacks	500
Total cash paid for acquisition	$	61,117

Acquisition of 41 Pawn Lending Locations in Texas

In August 2013, the Company completed the acquisition of substantially all of the assets of a chain of pawn lending locations in Texas that included 41 operating locations and the rights to one additional Texas pawn lending location (that was under construction but not open for business at the time of the acquisition), all of which were acquired from TDP Superstores Corp. and operated primarily under the name “Top Dollar Pawn.” The aggregate consideration paid for the acquisition was $103.7 million. The acquisition price was paid in cash and funded by available cash and borrowings under the Company’s line of credit. The Company incurred approximately $0.4 million of acquisition costs related to this transaction, which were expensed.

The allocation of the purchase price for this acquisition is as follows (dollars in thousands):



Pawn loans	$	14,468
Merchandise acquired	8,024
Pawn loan fees and service charges receivable	2,094
Property and equipment	4,230
Goodwill	62,335
Intangible assets	14,404
Other assets	383
Other liabilities	(829		)
Customer deposits	(1,365		)
Total consideration paid for acquisition, net of cash acquired	$	103,744

Other Acquisitions

In addition to the acquisitions discussed above, the Company acquired two, one and one lending locations for $1.1 million, $0.7 million and $0.7 million during the years ended December 31, 2015, 2014 and 2013, respectively.

Divestitures

On August 25, 2014, the Company completed the divestiture of its 47 pawn lending locations in Mexico for cash consideration of $18.5 million, net of cash held at the date of divestiture, including consideration related to a non-compete agreement. These sold locations represented all of the locations operated by the Company in Mexico. The Company recorded a loss of $2.8 million on the sale and a $2.1 million expense related to an uncollectible receivable incurred as a result of the Company’s discontinuation of its Mexico-based pawn operations. The combined amounts are included in “Loss on divestitures” in the Company’s consolidated statements of income and cash flows. The Company included $6.4 million of goodwill in the carrying value of the business in accordance with ASC 350, Intangibles—Goodwill and Other. The Company used the proceeds from the sale for general corporate purposes. Following the sale, the Company had no continuing involvement with these entities. This divestiture did not qualify as a discontinued operation in accordance with ASU 2014-08 as it did not have a major effect on the Company’s operations and financial results.

On August 25, 2014, the Company also completed the divestiture of its five pawn lending locations in Colorado for cash consideration of $3.0 million, net of cash held at the date of divestiture. These locations represented all of the locations operated by the Company in Colorado. The Company recorded a loss of $0.3 million on the sale, which is included in “Loss on divestitures” in the Company’s consolidated statements of income and cash flows. The Company used the proceeds from the sale for general corporate purposes.

In addition to the divestitures discussed above, the Company sold 12 lending locations through various transactions in 2015 for aggregate cash consideration of $2.9 million and an aggregate gain on sale of $0.3 million.