Acquisitions

12 Months Ended

Dec. 31, 2013

Acquisitions [Abstract]

Acquisitions

3. Acquisitions

Recent Acquisitions

For the acquisitions described below, the Company has made these acquisitions pursuant to its business strategy of expanding storefront operations for its pawn business in the United States. Goodwill arising from these acquisitions consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn lending locations acquired through these acquisitions in the retail services segment. 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 in Georgia and North Carolina (31 locations in Georgia and three locations in North Carolina) owned by PawnMart, Inc. The aggregate purchase price for the acquisition was approximately $61.1 million, all of which was paid as of December 31, 2013, except for a $0.5 million holdback payment. The acquisition price was paid in cash and funded through borrowings under the Company's line of credit. The Company incurred approximately $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 (a)		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

Includes $5.8 million related to customer relationships being amortized over seven years and $1.0 million related to a non-competition agreement being amortized over five years.

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 operate primarily under the name “Top Dollar Pawn.” The aggregate consideration paid for the acquisition was approximately $103.7 million. The acquisition price was paid in cash and funded by available cash and through the Company's line of credit. The Company incurred approximately $0.4 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	$	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 (a)		14,404
Other assets		383
Other liabilities		(829)
Customer deposits		(1,365)
Total consideration paid for acquisition, net of cash acquired	$	103,744

Includes $11.9 million related to customer relationships being amortized over seven years and $2.5 million related to a non-competition agreement being amortized over 10 years.

Acquisition of Nine-Store Chain of Pawn Lending Locations in Arizona

In October 2012, the Company completed the acquisition of substantially all of the assets of a nine-store chain of pawn lending locations in Arizona owned by Ca$h Corporation, Pawn Corp #1, Inc., Pawncorp #2, Inc. and Pawncorp #4, Inc. The aggregate cash consideration paid for this transaction, which was funded with borrowings under the Company's line of credit, was approximately $15.6 million. The Company incurred an immaterial amount of acquisition costs related to the acquisition.

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

Pawn loans	$	3,887
Merchandise held for disposition		712
Pawn loan fees and service charges receivable		509
Property and equipment		200
Goodwill		7,662
Intangible assets(a)		2,500
Other assets		103
Customer deposits		(14)
Net assets acquired	$	15,559
Cash consideration payable as of December 31, 2012		(128)
Total consideration paid for acquisition as of December 31, 2012		15,431
Cash paid in 2013 upon receipt of regulatory licenses		128
Total cash paid for acquisition	$	15,559

Includes $2.0 million related to customer relationships being amortized over eight years and $0.5 million related to a non-competition agreement being amortized over five years.

Acquisition of 25-Store Chain of Pawn Lending Locations in Kentucky, North Carolina and Tennessee

In September 2012, the Company entered into an agreement to acquire substantially all of the assets of a 25-store chain of pawn lending locations located in Kentucky, North Carolina, and Tennessee owned by Standon, Inc., Casa Credit, Inc., Classic Credit, Inc. and Falcon Credit, Inc. The Company assumed the economic benefits of all these of these pawnshops by operating them under management agreements that commenced on September 27, 2012, and the final closing occurred on December 16, 2012. The aggregate cash consideration for the transaction, which was funded with borrowings under the Company's line of credit, was $55.1 million. The Company incurred an immaterial amount of acquisition costs related to the acquisition.

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

Pawn loans	$	7,057
Merchandise held for disposition		7,534
Pawn loan fees and service charges receivable		1,506
Property and equipment		631
Goodwill		31,521
Intangible assets(a)		8,000
Customer deposits		(1,158)
Total consideration paid for acquisition	$	55,091

Includes $7.0 million related to customer relationships being amortized over seven years and $1.0 million related to a non-competition agreement being amortized over five years.

Pawn Partners Acquisition

In November 2011, the Company entered into an agreement to acquire substantially all of the assets of Pawn Partners, Inc., Pawn Partners -Tucson, Inc., Pawn Partners—Tucson II, Inc., Pawn Partners—Tucson 3, Inc., Pawn Partners—Tucson 4, Inc. and Pawn Partners—Yuma, Inc. (collectively, “Pawn Partners”) (the “Pawn Partners acquisition”). The Company assumed the economic benefits of these pawnshops by operating them under a management arrangement that commenced on November 30, 2011, and the final closing occurred in the first quarter of 2012. The acquisition included a seven-store chain of pawn lending locations located in Tucson, Flagstaff and Yuma, Arizona. The aggregate cash consideration for the transaction, which was funded with borrowings under the Company's line of credit, was $53.6 million. The Company incurred acquisition costs of $0.1 million related to the acquisition.

The purchase price of the Pawn Partners acquisition was allocated as follows (dollars in thousands):

Pawn loans	$	10,657
Merchandise held for disposition		5,485
Pawn loan fees and service charges receivable		1,424
Property and equipment		70
Goodwill		26,679
Intangible assets(a)		9,570
Other liabilities		(99)
Customer deposits		(225)
Net assets acquired	$	53,561
Cash consideration payable as of December 31, 2011		(4,300)
Total cash paid for acquisition as of December 31, 2011	$	49,261
Cash paid in 2012 upon receipt of regulatory licenses		4,300
Total consideration paid for acquisition	$	53,561

Includes $7.0 million related to customer relationships being amortized over eight years, $2.5 million related to a non-competition agreement being amortized over five years and $0.1 million related to leasehold interest being amortized over ten years.

Other

In addition to the acquisitions discussed above, the Company acquired one, three and one domestic retail services locations for $0.7 million, $3.2 million and $0.3 million during the years ended December 31, 2013, 2012 and 2011, respectively.

In addition to the acquisitions noted above, the Company's e-commerce segment also acquired approximately $0.2 million of intangible assets during the year ended December 31,2012.