Aaron's Inc. Invests in U.K. Company

October 9, 2011  by in UnCategorized   

By Home Furnishings Business in Acquisition on October 10, 2011

Rent-to-own furniture, electronics and appliance retailer Aaron's (NYSE: AAN) looks to acquire 11.5 percent of U.K. rent-to-own company Perfect Home Holdings.

Perfect Home, which operates under the PerfectHome brand, was founded in 2006 and provides basic home furnishings in the U.K. to the non-standard credit market. Based near Birmingham, PerfectHome currently has 45 stores open throughout England and has plans to approximately double the number of stores over the next several years.

Aaron's will pay 10 million British pounds, or approximately $15.4 million at current exchange rates, for its interest in PerfectHome and will have an option to increase its ownership in the future. PerfectHome will use the funds primarily o accelerate the growth of its store openings. The closing of the transaction requires regulatory approval which is currently being sought. The transaction will be effective only following Aaron's obtaining such approval. The investment will be recorded as an asset on Aaron's balance sheet.

"We are very excited about this investment in PerfectHome," said Robert C. Loudermilk Jr., president and CEO of Aaron's, Atlanta. "Not only will it provide PerfectHome growth capital, it will also enable Aaron's to learn about the U.K. market for possible future expansion there and perhaps provide an eventual gateway into other European markets. Although we feel our growth prospects remain excellent in the U.S., we plan to further explore international opportunities that could complement domestic growth."