cash converters to make two acquisitions and spp

- Monday - July 10: (RWE Aust Business News) - Cash
Converters International Ltd (ASX:CCV) has agreed in principle to enter
into a share purchase agreement to acquire Mon-e Pty Ltd.
Mon-e is the company which provides the software program and
back-office support for the Cash Converters chain of franchisees to make
cash advances to their customers.
Cash Converters will pay $15 million for Mon-e, comprising 30 per
cent in cash and 70 per cent in shares to be issued at 40c per share.
The purchase price will be subject to a performance clawback with
respect to the shares.
The company has also agreed in principle to enter into a share
purchase agreement to acquire the whole of the issued capital of the
Safrock group of companies.
Safrock makes loans to customers of the Cash Converters franchise
chain using franchisees as its agents. These loans comprise secured and
unsecured loans between $1,000 and $10,000.
Cash Converters will pay $17.5 million for the Safrock Group,
payable as to 30 per cent in cash and 70 per cent in shares.
As with the Mon-e, acquisition, the shares will be issued at 40c
each the purchase will be subject to a performance clawback with respect
to the shares.
The Company intends to raise the cash component of each
acquisition and additional working capital totalling $15 million by way
of a share placement at 40c per share.
This placement will comprise two steps: a placement of shares
comprising not more than 15 per cent of the company's issued capital,
followed by a further placement with shareholder approval.
Firm commitments have been received from sophisticated and
professional investors being clients of Bell Potter with the first
tranche under the 15 per cent rule scheduled to be received on July 31.
In addition to raising the cash component of each of the two
acquisitions referred to, the Cash Converters intends to raise up to a
maximum of $3 million as additional working capital by way of a
Shareholder Share Purchase Plan (SPP).
The SPP contemplates that each existing shareholder will be given
the opportunity to acquire up to $5,000 worth of shares at 40c per share.
The company said that after these two acquisitions and the
capital raisings, it will be strongly positioned for the future with
substantially enhanced earnings per share on the fully diluted capital
which will rise from the present issued capital of 146 million shares to
250 million shares.
Cash Converters also said that based on unaudited management
accounts, it expects net profit for the 2006 financial year will be at
least $4 million, with EBIT of at least $5.75 million.
Shares of Cash Converters rose 8c to 55c this morning.