|To:||All DFC Employees|
|From:||Jeff Weiss, Chairman and CEO|
|Date:||April 2, 2014|
|Subject:||Exciting News about our Future|
Dear Team Members:
I want to let you know about an exciting new chapter in our company’s history.
We have entered into an agreement to be acquired by Lone Star Funds, a global private equity firm based in Texas. This agreement is an important endorsement of our company as a valued investment, and will help us better secure our future as an industry leader in the financial services market.
As a result of the transaction, which we expect to be completed in the third calendar quarter of 2014, we will once again become a private company, and will no longer be traded on the NASDAQ. As you many of you may remember, we were a privately held company prior to going public in 2005.
Lone Star has extensive experience in the financial services and retail sectors, and has an excellent history of working with companies and their management teams to help them achieve outstanding operating and financial objectives. With their commitment, we believe we can accelerate our plans to grow our business, resulting in enhanced opportunities for all of us and our customers.
We are at the early stages of this transaction and there is still a lot of work ahead of us. In particular, over the coming months we will be seeking approvals from both our regulatory agencies and shareholders. In parallel to those efforts, members of DFC will be working alongside representatives of Lone Star to plan our strategy for after we close the transaction. We want to be ready to hit the ground running on day one, and we will provide you with updates on those plans and our future activities as we reach key milestones.
Naturally, you will want to know how today’s announcement impacts you. First, until the transaction closes, we will continue to operate as an independent company. While there will ultimately be a change in the equity ownership of our company, it will have little effect on our business operations or on your day-to-day responsibilities. Lone Star agrees with us that our people are among our most valuable assets and recognizes that each of you have been a driving force behind our success.
I want every one of you to know how much we value and appreciate the important contributions you make every day. It is your diligence that has been the foundation for our achievements over the last 30 years.
I encourage all of you to remain focused on continuing to provide the same convenience, accessibility and high quality service that our global customer base has come to expect from us.
Today’s announcement may lead to increased interest from the media and other third parties. It is crucial that we speak with one voice and that you not directly respond to any external inquiries. Please direct all media or third party inquiries to our external communications partner, ICR, via either Garrett Edson or Phil Denning .
Jeff Weiss Chairman and Chief Executive Officer
Lone Star Fund VIII (U.S.), L.P. has committed to capitalize Parent, at or prior to the Closing, with an aggregate equity contribution in an amount of $750,000,000 on the terms and subject to the conditions set forth in the equity commitment letter dated April 1, 2014 (the “ Equity Commitment Letter ”).
Pursuant to the debt commitment, Jefferies Finance LLC and jointly, Credit Suisse AG and Credit Suisse Securities (USA) LLC (the “ Lenders ”) have committed to provide, on a several basis, 60% and 40%, respectively, of (i) a $125,000,000 senior secured, asset-based revolving credit facility and (ii) to the extent that all or any portion of the $750,000,000 senior secured notes contemplated by the Debt Commitment Letter are not issued on or prior to the Effective Time, a senior secured bridge facility in an aggregate principal amount of up to $750,000,000, on the terms and subject to the conditions set forth in a debt commitment letter entered into by the Lenders in connection with the Merger (the “ Debt Commitment Letter ”).
Payday loan fans, expect to see a lot more consolidation in our industry! The heat is on, new competitors are entering (often funded by Silicon Valley), and the current regulatory environment is driving this momentum.
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