Update on EZCORP strategic alliance (3559Q)
18 Octubre 2011 - 2:33AM
UK Regulatory
TIDMCCVU
RNS Number : 3559Q
Cash Converters International Ld
18 October 2011
18 October 2011
Cash Converters International Ld
Update on EZCORP Offer and Global Strategic Alliance with Cash
Converters
Cash Converters International Limited is pleased
to announce that EZCORP, Inc through its wholly
owned subsidiary CCV Virginia, Inc has acquired
from Cash Converters United LC ("CC United")
its rights as sub-franchisor to the Cash Converters
brand and name in several states in the USA.
Since 2001, CC United has held a licence to the
territories of Virginia, North Florida and Eastern
Pennsylvania. Under its licence, it has the exclusive
right to develop Cash Converters stores within
its territory and is contracted to pay a royalty
of 20% of its gross receipts from franchisees.
CC United held the First Right of Refusal to
purchase the territory rights for the following
states at a price of US$2,500 per store times
the number of stores projected for the state
(being the population divided by 100,000): District
of Columbia, Delaware, North and South Carolina,
Georgia, Florida, Maryland, Texas, Ohio, New
York, Kentucky, Alabama, Tennessee, Louisiana,
Mississippi, Arizona, Michigan, Wisconsin.
Under its licence CC United has opened and operated
seven corporate stores. EZCORP's subsidiary has
taken an assignment of all of the rights of CC
United and has also acquired all seven Cash Converters
stores. It will also be responsible to pay all
royalties under the licence.
In April 2011, EZCORP acquired the trademark
and licensing rights of Cash Converters in Canada,
including the franchisor rights with respect
to 13 Cash Converters franchised stores in Canada.
Since then, EZCORP has opened one company-owned
store under the Cash Converters brand and has
converted 14 of its existing CASHMAX stores to
the Cash Converters format and brand. EZCORP
intends to convert the remainder of its 58 CASHMAX
stores to the Cash Converters brand over the
next year.
As a result of these transactions, there are
no sub-franchisors or trade mark licensees within
the USA and Canada other than wholly owned subsidiaries
of EZCORP. Cash Converters International Limited
played no role in these acquisitions by EZCORP
other than providing a formal consent to the
assignment of the licences. However, the Company
supports these initiatives. The Managing Director,
Mr Peter Cumins, said: "We are delighted that
the commitment by our major shareholder to the
Cash Converters brand has taken such a tangible
form. We see this as a very promising start by
EZCORP along the path of developing our brand
in the USA and Canada to the mutual benefit of
both companies."
Eric Fosse, EZCORP's President of North American
Operations, stated: "This is a strategically
important acquisition for several reasons. First,
it gives us an immediate footprint in a new geographic
area of operations. This area nicely complements
our existing operations in Florida, Georgia and
Tennessee, allowing us to leverage our existing
management infrastructure. Second, it kicks off
our utilization of the Cash Converters brand
and the buy/sell format in the United States,
a strategy we have been pursuing in Canada for
several months now with positive results. And
third, it provides us with access to additional
opportunities to expand our presence, under the
Cash Converters brand, across the U.S."
Enquiries
Cash Converters International Limited
Mr D.R. Groom +61 (8) 9221 9111
Charles Stanley Securities
Dugald J.Carlean / Karri Vuori +44 (0) 20 7149
6000
18 October 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
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