In a bid to consolidate its existing foothold in UK, DFC Global Corp. (DLLR) acquired Monte Caja Oro, a chain of 27 stores that are located primarily in the Catalonian and Andalusian regions of Spain.
The transaction finally cost DFC Global nearly $6 million in addition to its payment for the pawn pledge inventory’s value. This acquisition is expected to be immediately accretive to earnings.
Post the acquisition, DFC Global – an international diversified financial services company – now has stores in 58 locations in Spain.
All these stores of Monte Caja Oro primarily offer gold-buying services and also pawn lending on gold jewelry. With the new acquisition, DFC Global is expected to become a leading secured pawn lender in Europe.
Moreover, DFC Global’s current efforts of expanding itself across Spain, the Czech Republic, Poland and Romania, given the huge population of these areas and attractive operating characteristics, are expected to bolster the company’s top-line and bottom-line growth in the upcoming quarters. These continuous expansions through acquisitions are also giving the company ample scope to broaden its product suit and widen its geographic footprints.
DFC Global has consistently adopted the inorganic route to ramp up its growth profile. In Jun 2012, DFC Global acquired the leading pawn loan provider in Romania – Express Credit. With the acquisition, DFC Global strengthened its pawn lending business on gold jewelry, highly valuable and small-sized electronics and automobile along with gold-buying services.
Among others in the credit services industry, FleetCor Technologies Inc. (FLT) signed an agreement to acquire DB Trans S.A., a leading Brazilian payment solution provider who caters to independent truckers in Brazil, in Aug 2013.
There has been no earnings momentum for DFC Global over the last 7 days. With optimism over the latest acquisition, we expect analysts to raise estimates exerting an upward pressure on the Zacks Rank. DFC global presently carries a Zacks Rank #3 (Hold).
Better-ranked stocks like Euronet Worldwide Inc. (EEFT) and Cielo SA (CIOXY), each with a Zacks Rank #1 (Strong Buy), are worth considering.
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