DFC Global To Be Taken Private By Lone Star Funds In $1.3 Bln Deal

(RTTNews) - Alternative financial services provider DFC Global Corp. (DLLR) agreed Wednesday to be taken private by Lone Star Funds for $9.50 per share in cash in a deal valued at $1.3 billion, including assumed debt. The transaction, which has the unanimous approval of DFC Global's Board of Directors, is expected to close in the third calendar quarter of 2014.

"We are pleased to have reached this agreement, which delivers immediate cash value to our stockholders. Lone Star Funds is a sophisticated investor with broad-based financial and retail expertise, and we look forward to taking advantage of enhanced financial flexibility to find new ways to build our business while continuing to meet and exceed the needs of our global customer base," DFC Global Chairman and CEO Jeff Weiss said.

Dallas, Texas-based Lone Star is a global private equity firm that invests in distressed real estate, equity, credit, and other financial assets.

The deal will see DFC Global stockholders receiving $9.50 in cash for each share of DFC Global they own. The offer represents a 5.8 percent premium over DFC Global's closing stock price of $8.98 on Tuesday.

The closure of the deal is primarily subject to receipt of affirmative vote of the holders of a majority of the outstanding shares of DFC and certain approvals from both U.S. and foreign regulators. DFC noted that competition-related approval requirements are expected to be limited in number.

Berwyn, Pennsylvania-based DFC Global Corp. was formerly known as Dollar Financial Corp. and it changed its name in August 2011.

DFC Global is a global diversified financial services company serving primarily unbanked and under-banked consumers for over 30 years. It provides unsecured short-term consumer loans, secured pawn loans, check cashing, gold buying, money transfers and reloadable prepaid debit cards.

Separately, DFC Global provided guidance for the third quarter and slashed earnings forecast for the full-year 2014, citing principally the revenue and expense effects of the transition in the U.K. to a new regulatory environment. It also reflects the continued unfavorable trends in the value of the Canadian dollar with respect to the U.S. currency, in addition to the decrease in gold commodity prices.

The company expects pro forma operating loss for the third quarter in a range of $0.04 to breakeven per share, on projected total consolidated revenues between $248 million and $252 million.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $0.12 per share, on quarterly revenues of $269.93 million for the third quarter. Analysts' estimates typically exclude special items.

Looking ahead to fiscal 2014, the company slashed its pro forma operating earnings guidance to a range of $0.04 to $0.12 per share from the previous forecast range between $0.35 and $0.80 per share. Street is currently looking for full-year 2014 earnings of $0.48 per share.

In Wednesday's regular trading session, DLLR is currently trading at $9.41, up $0.43 or 4.79% on a volume of 6.35 million shares. In the past 52-week period, the stock has been trading in a range of $6.24 to $16.43.