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Industry News
Popular, Inc. Agrees to Sell Check Cashing Operation to ACE Cash Express, Inc.
SAN JUAN, Puerto Rico, Sept. 21 /PRNewswire-FirstCall/ -- Popular, Inc.
(Nasdaq: BPOP) announced that ACE Cash Express, Inc. (Nasdaq: AACE) will
acquire substantially all of the assets of Popular Cash Express, Inc. ("PCE"),
Popular's wholly owned check cashing business, for $36 million. PCE owns and
operates stores in California, Arizona, Florida and Texas. PCE, unlike most
other check cashing operators in the country, never entered the payday loan
business.
Popular, Inc. will subscribe, as part of the transaction, a subordinated
convertible note to be issued by ACE in the amount of up to $22.5 million.
Under the terms of the Convertible Note Agreement, Popular has the right to
convert the debt into common shares of ACE at a 35% premium over ACE's average
closing share price for the 30 days preceding the initial closing date. If
exercised the convertible instrument would give Popular an ownership interest
of 4.99% in ACE based on current outstanding shares. Popular and ACE also
agreed to explore mutually beneficial opportunities in the areas of
transaction processing, cash management, and working capital and term
financing.
"We believe strongly in the potential of this business to serve well the
large and growing low and moderate income segments of the population," said
Roberto R. Herencia, President of Banco Popular North America. "This will
allow us to hold an investment of the largest publicly traded player in the
retail check cashing business. We remain committed to the industry as lender
and servicer, and will do so now without being a direct competitor."
Richard L. Carrion, Chairman and CEO of Popular, said, "We have been
constrained in our ability to compete fairly against non-bank owned check
cashing operations. Offering loan solutions has become a key component of
this business model. PCE has built a best-in-class compliance program, but
without clear regulatory and legal guidance on new services, including
lending, for bank-owned retail check cashing services, PCE cannot meet the
demands of its customers."
Carrion added that "Popular will continue providing comprehensive
financial services to the underserved communities. We will remain an active
participant in the industry as a lender and servicer to other retail check
cashing institutions, and will continue to collaborate with regulators and
lawmakers to accelerate the integration of unbanked and underbanked
individuals into mainstream financial services."
Jay B. Shipowitz, President and Chief Executive Officer of ACE, stated,
"The addition of the Popular Cash Express stores, and more importantly their
people, is an opportunity to strengthen our presence in several key markets
and leverage our existing infrastructure. Consistent with our growth plans,
we will continue to combine new store openings with opportunistic acquisitions
like Popular Cash Express. We welcome their customers and their 333 employees
to the ACE network of over 1,370 stores."
The agreements signed by Popular and ACE do not require regulatory
approval and are subject to customary closing terms and conditions. The
transaction is expected to become effective during the month of October.
About Popular, Inc.
Popular, Inc. is a full service financial services provider with
operations in Puerto Rico, the United States, the Caribbean and Latin America.
As the leading financial institution in Puerto Rico with over 280 branches and
offices, the Corporation offers retail and commercial banking services through
its banking subsidiary, Banco Popular de Puerto Rico, as well as investment
banking, auto and equipment leasing and financing, mortgage loans, consumer
lending, insurance and information processing through specialized
subsidiaries. In the United States, the Corporation has established the
largest Hispanic-owned financial services franchise, providing complete
financial solutions to all the communities it serves. Banco Popular North
America operates over 135 branches in California, Texas, Illinois, New York,
New Jersey and Florida, as well as 112 financial services stores under the
name of Popular Cash Express. The Corporation's consumer finance subsidiary in
the United States, Popular Financial Holdings, operates nearly 200 retail
lending locations offering mortgage and personal loans, and also maintains a
substantial wholesale broker network, a warehouse lending division, loan
servicing, and an asset acquisitions unit
Popular, Inc. continues to use its expertise in technology and electronic
banking as a competitive advantage in its Caribbean and Latin America
expansion, through its financial transaction processing company, EVERTEC. The
Corporation is exporting its 111 years of experience through the region while
continuing its commitment to meet the needs of retail and business clients
through innovation, and to fostering growth in the communities it serves.
Popular is ranked among FORTUNE magazine's 2005 100 Best Companies to Work
For.
About ACE:
ACE Cash Express, Inc. is a leading retailer of financial services,
including check cashing, short-term consumer loans and bill payment services,
and the largest owner, operator and franchisor of check cashing stores in the
United States. As of June 30, 2005, ACE had a network of 1,371 stores in 37
states and the District of Columbia, consisting of 1,142 company-owned stores
and 229 franchised stores. ACE focuses on serving consumers, many of whom
seek alternatives to traditional banking relationships in order to gain
convenient and immediate access to check cashing services and short-term
consumer loans. ACE's website is found at http://www.acecashexpress.com.
An electronic version of this release can be found at the Corporation
website, http://www.popularinc.com .
For more information:
Investor Relations:
Roberto R. Herencia Jorge Junquera
President Chief Financial Officer
Banco Popular North America Senior Executive Vice President
847-994-6599 Popular, Inc.
787-754-1685
Media Relations:
Juan Carlos Cruz Teruca Rullan
Vice President Senior Vice President
Public Relations, Communication & Corporate Communications
Leadership Popular, Inc.
Banco Popular North America 917-679-3596
847-994-6442
SOURCE Popular, Inc.Web Site: http://www.popularinc.com