Acquisition Opportunity - Group of MidAtlantic USA Pawnshops
Firelight Partners Investment Banking Group has been retained by the owners of a group of pawnshops located in the Mid-Atlantic region of the United States to assist in the sale of the business. The company has been in business since 1890. It is located in a populous state with a median family income that is second in the nation. It has grown from the original store to twelve locations with plans to continue its growth. The company is well run and generates excellent cash flow.
Overview: The company provides small cash loans, averaging $150, to customers using personal items such as jewelry and electronics as collateral. The company physically secures the collateral so issues of collection on the loans are not a factor at any point. Other services provided include check cashing, money orders, money transmission and bill payment.
Business Strategy: The company is focused on jewelry transactions. It is planning to introduce a concierge type service in more affluent areas and is considering accepting unique collateral. The company has also launched an e-commerce offering that it plans to expand.
Competitive Advantage: There are strict state rules and regulations governing new entrants including an extensive process to obtain licenses. If a new applicant does successfully acquire a license, they are also faced with significant restrictions from local jurisdictions.
Expansion Opportunities: The company has determined that customers usually come from within a five-mile radius of a store location. Only fifty percent of the residents of the state in which the company is located live within five miles of the pawnshops in existence today. As a result, there is an excellent untapped market opportunity. In addition, the company has created a "lobby" style of store modeled after jewelry stores. Additional “cookie cutter” stores could be opened quickly in viable locations across the state with minimal investment and construction to generate rapid growth.
The owners of the company have retained Firelight Partners Investment Banking Group as their advisor for the transaction. Detailed information is available to interested parties who have been approved by the Company and who have executed a confidentiality agreement.
Firelight Partners Investment Banking Group provides strategic advisory and capital raising services to emerging growth and small to mid-market companies, their investors and their executives.
The information provided has been prepared by Firelight Partners Investment Banking Group and is for informational purposes only. This information has been prepared from data believed to be reliable and should only be used as a general guide. Past performance is not indicative of future results. The information provided is not a complete summary or statement of all available data necessary for making an investment decision. This information should be reviewed along with other confidential material and information provided by the Company in order to understand fully all the implications and risks of the securities to which it relates.