Sam is a trader and one of our lead stock analysts at AskTraders. After starting his career predominantly in the forex markets, Sam now focuses on gold and stocks with a preference for macroeconomic analysis.
Consumer finance firm, CURO Group’s (NYSE: CURO) share price has skyrocketed after it said on Friday that the company is set to benefit from Katapult’s announced merger with SPAC, FinServ Acquisition Corp (NASDAQ: FSRV)
CURO revealed that it owns 40% of Katapult, a leading provider of e-commerce point-of-sale lease purchase options for non-prime US consumers.
The merger values Katapult at approximately $908 million, which includes an earnout of up to $75 million in the form of additional common shares in the new public company.
It means that CURO is set to benefit from a combination of cash and stock in the new company worth around $365 million, which includes an earnout of up to $30 million in the form of additional common shares in the new public company. CURO has made a total cash investment in Katapult of $27.5 million to date.
“We first began investing in Katapult in 2017 as we identified multiple catalysts for future success–an innovative e-commerce POS business model, a focus on the vast and underpenetrated non-prime financing market and a clear and compelling value proposition for merchants and consumers,” commented Don Gayhardt, President and CEO of CURO.
The company said it expects to receive up to $125 million in cash once the transaction has been completed while maintaining an ownership stake of at least 21% in the new company.
CURO’s stock price has surged after the news, currently trading 78.04% higher at $15.65 following Thursday’s close at $8.79.
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