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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2021

The following table summarizes the consideration transferred in connection with the AFF Acquisition, net of cash acquired (in thousands except share and per share amounts):


	AFF Acquisition
Shares of FirstCash Holdings, Inc. common stock issued	8,046,252
Closing common stock price per share at December 16, 2021	$	62.83
Stock consideration	$	505,546
Cash consideration paid to AFF shareholders at closing	253,087
Cash consideration paid to extinguish AFF pre-existing debt	257,278
Present value of deferred consideration payable to AFF shareholders on December 31, 2022	23,873
Estimated fair value of Contingent Consideration (see Note 6)	127,420
Less cash acquired	(48,263)
Aggregate purchase consideration	$	1,118,941

Schedule of Preliminary Allocations of Purchase Price

The allocation of the aggregate purchase consideration, net of cash acquired and subject to future measurement period adjustments, is as follows (in thousands):


	AFF Acquisition
Accounts receivable	$	11,660
Finance receivables (1)	225,261
Leased merchandise	139,649
Prepaid expenses and other current assets	4,474
Property and equipment	11,670
Operating lease right of use asset	491
Goodwill (2)	503,106
Intangible assets (3)	305,100
Accounts payable and accrued liabilities	(28,357)
Customer deposits and prepayments	(11,014)
Lease liability, current	(10)
Deferred tax liabilities	(42,608)
Lease liability, non-current	(481)
Purchase price	$	1,118,941

(1)Finance receivables acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”). The Company evaluated the acquired finance receivables for deterioration in credit quality primarily based on delinquency status. At the acquisition date, an estimate of expected lifetime credit losses for PCD finance receivables is added to the acquisition date fair value to establish the initial amortized cost basis of the PCD finance receivables. As the initial allowance for credit losses is added to the fair value, there is no provision for loan losses recognized upon acquisition of a PCD loan. See Note 7.

The preliminary allocation of the aggregate purchase price for these individually immaterial pawn store acquisitions during 2021 (the “2021 Pawn Acquisitions”) is as follows (in thousands):


	2021 Pawn Acquisitions
Pawn loans	$	7,920
Accounts receivable, net	470

Inventories	8,822
Other current assets	294
Property and equipment	1,174
Goodwill (1)	59,645
Intangible assets	2,835
Other non-current assets	36
Current liabilities	(1,659)


Aggregate purchase price	$	79,537

(1)Substantially all of the goodwill is expected to be deductible for U.S. income tax purposes.

Financing Receivables, Fair Value

A reconciliation of the difference between the fair value of the PCD finance receivables and the unpaid principal balance as of the date of the acquisition is as follows (in thousands):


	PCD Finance Receivables
Unpaid principal balance of PCD finance receivables	$	41,900
Non-credit discount	(4,120)
Amortized cost of PCD finance receivables	37,780
Less allowance for loan losses recognized for PCD finance receivables	32,036
Fair value of PCD finance receivables	$	5,744

A reconciliation of the difference between the fair value of the non-PCD finance receivables and the unpaid principal balance as of the date of the acquisition is as follows (in thousands):


	Non-PCD Finance Receivables
Unpaid principal balance of non-PCD finance receivables	$	177,456
Fair value premium	42,061
Fair value of non-PCD finance receivables	219,517
Less allowance for loan losses recognized for non-PCD finance receivables	44,250
Carrying value of non-PCD finance receivables	$	175,267

(2)The goodwill is attributable to the excess of the aggregate purchase consideration over the fair value of the net tangible and intangible assets acquired and liabilities assumed and is considered to represent the synergies and economies of scale expected from combining the operations of the Company and AFF. This goodwill has been assigned to the retail POS payment solutions reporting unit. Excluding any potential earnout payments, approximately $212.3 million of the goodwill arising from the AFF Acquisition is expected to be deductible for U.S. income tax purposes.

Schedule of Finite-Lived Intangible Assets

Intangible assets acquired and the respective useful lives assigned consist of the following (in thousands, except useful life):


			Useful Life
	AFF Acquisition		(In Years)
Merchant relationships	$	194,000	7
Developed technology	99,400		5
Trade name	10,200		2
Relationships with existing lessees	1,500		1

Total intangible assets	$	305,100

The following table details the remaining weighted-average amortization periods for the definite-lived intangible assets included in the table above:


			Weighted-Average Remaining Amortization Period (Years)
As of December 31, 2021
Merchant relationships			3.3
Developed technology			2.5
Customer relationships			1.6
Trade name			1.0
Lessee relationships			0.7
Total definite-lived intangible assets			3.0

Business Acquisition, Pro Forma Information

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the AFF Acquisition and the 2021 Pawn Acquisitions had occurred on January 1, 2020, after giving effect to certain adjustments (in thousands, except per share amounts):


	Year Ended				Year Ended
	December 31, 2021				December 31, 2020
	As Reported		Pro Forma		As Reported		Pro Forma
Total revenue	$	1,698,965	$	2,305,860	$	1,631,284	$	2,024,055
Net income	124,909		156,257		106,579		60,059

Net income per share:
Basic	$	3.05	$	3.21	$	2.57	$	1.21
Diluted	3.04		3.20		2.56		1.21