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Acquisitions | 12 Months Ended
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Dec. 31, 2022
Business Combinations [Abstract] |
Acquisitions | ACQUISITIONS 2022 Pawn Acquisitions Consistent with the Company’s strategy to continue its expansion of pawn stores in selected markets, during 2022, the Company acquired 30 pawn stores in the U.S. in six separate transactions and one store in Guatemala in a separate transaction. The aggregate purchase price for these acquisitions totaled $73.0 million, net of cash acquired and subject to future post-closing adjustments. The aggregate purchase price was composed of $69.6 million in cash paid at closing and remaining short-term amounts payable to the sellers of approximately $3.4 million. During 2022, the Company also paid $2.2 million of purchase price amounts payable related to prior-year pawn acquisitions. The purchase price of each of the 2022 pawn acquisitions was allocated to assets acquired and liabilities assumed based upon the estimated fair market values at the date of acquisition. The excess purchase price over the estimated fair market value of the net assets acquired has been recorded as goodwill. The goodwill arising from these pawn store acquisitions consists largely of the synergies and economies of scale expected from combining the operations of the Company and the pawn stores acquired. These pawn acquisitions were not material individually or in the aggregate to the Company’s consolidated financial statements. The estimated fair value of the assets acquired and liabilities assumed are preliminary, as the Company is gathering information to finalize the valuation of these assets and liabilities. The preliminary allocation of the aggregate purchase price for these individually immaterial pawn store acquisitions during 2022 (the “2022 Pawn Acquisitions”) is as follows (in thousands):
| 2022 Pawn Acquisitions
Pawn loans | $ | 7,291 |
Accounts receivable, net | 426 |
Inventories | 11,523 |
Property and equipment | 300 |
Goodwill (1) | 55,455 |
Intangible assets | 310 |
Current liabilities | (2,329) |
Aggregate purchase price | $ | 72,976 |
(1)Substantially all of the goodwill is expected to be deductible for income tax purposes. The results of operations for the 2022 Pawn Acquisitions have been consolidated since the respective acquisition dates. During 2022, revenue from the 2022 Pawn Acquisitions was $4.0 million and the net loss from the 2022 Pawn Acquisitions since the acquisition dates (including $1.2 million of transaction costs, net of tax) was approximately $0.2 million. Transaction costs associated with the 2022 Pawn Acquisitions were expensed as incurred and are presented in the consolidated statements of income as merger and acquisition expenses. These expenses include investment banking, legal, accounting and other related third-party costs. Unaudited pro forma financial information reflecting the consolidated results of operations of the Company as if the 2022 Pawn Acquisitions had occurred on January 1, 2021 has not been presented as the 2022 Pawn Acquisitions were not significant in relation to the Company’s consolidated financial position or results of operations. 2021 American First Finance Acquisition On December 17, 2021, the Company completed the AFF Acquisition. Under the terms and conditions set forth in the business combination agreement dated October 27, 2021, as amended, the Company acquired all of the equity interests of AFF in exchange for 8,046,252 shares of the Company’s common stock and cash consideration. Immediately following the AFF Acquisition, the Company’s shareholders owned approximately 83% of the common stock of the Company and the seller parties owned approximately 17%. In addition to the closing purchase price, the seller parties have the right to receive up to an additional $375.0 million of contingent consideration (the “Contingent Consideration”), which is payable in cash or Company common stock, at the Company’s discretion. In particular, the seller parties had the right to receive up to $250.0 million of additional consideration if AFF achieved certain adjusted EBITDA targets for the period consisting of the fourth quarter of 2021 through the end of 2022. AFF did not achieve the threshold adjusted EBITDA target for the period ending December 31, 2022 and, therefore, the $250.0 million of additional consideration was not earned by the seller parties. The seller parties also have the right to receive up to $50.0 million of additional consideration if AFF achieves certain adjusted EBITDA targets for the first half of 2023. Lastly, the seller parties had the right to receive up to $75.0 million of additional consideration in the event that the highest average stock price of the Company for any 10-day period from December 6, 2021 through February 28, 2023 is less than $86.25. As a result of an increase in the Company’s stock price during October 2022, no such contingent payment to the seller parties is required. See Note 6. 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 |
During 2022, the Company made certain measurement period adjustments to the preliminary purchase price allocation, which resulted in a decrease in goodwill of $16.9 million. The adjusted purchase price allocation is reflected in the accompanying consolidated balance sheet as of December 31, 2022. The following table details the preliminary purchase price allocation as of December 31, 2021, the measurement period adjustments made during the twelve months ended December 31, 2022 and the final purchase price allocation as of December 31, 2022 (in thousands):
| December 31, |  | 2022 |  | December 31,
| 2021 |  | Adjustments |  | 2022
Accounts receivable | $ | 11,660 |  |  | $ | — |  |  | $ | 11,660 |
Finance receivables | 225,261 |  |  | — |  |  | 225,261 |
Leased merchandise | 139,649 |  |  | — |  |  | 139,649 |
Prepaid expenses and other current assets | 4,474 |  |  | (188) |  |  | 4,286 |
Property and equipment | 11,670 |  |  | (9) |  |  | 11,661 |
Operating lease right of use asset | 491 |  |  | — |  |  | 491 |
Goodwill | 503,106 |  |  | (16,901) |  |  | 486,205 |
Intangible assets | 305,100 |  |  | — |  |  | 305,100 |
Accounts payable and accrued liabilities | (28,357) |  |  | (1,116) |  |  | (29,473) |
Customer deposits and prepayments | (11,014) |  |  | — |  |  | (11,014) |
Lease liability, current | (10) |  |  | — |  |  | (10) |
Deferred tax liabilities (1) | (42,608) |  |  | 18,214 |  |  | (24,394) |
Lease liability, non-current | (481) |  |  | — |  |  | (481) |
Purchase price | $ | 1,118,941 |  |  | $ | — |  |  | $ | 1,118,941 |
(1)Measurement period adjustment is primarily a result of the seller finalizing the ending tax basis in the assets and liabilities acquired, which carried over to the Company. 2021 Pawn Acquisitions During 2021, the Company acquired 46 pawn stores in the U.S. in three separate transactions and acquired a pawn license that will be used to open a new pawn store in the state of Nevada. The aggregate purchase price for these acquisitions totaled $79.5 million, net of cash acquired. The aggregate purchase price was composed of $76.0 million in cash paid at closing and remaining short-term amounts payable to the sellers of approximately $3.5 million. 2021 Unaudited Pro Forma Financial Information The results of operations for the AFF Acquisition and the 2021 Pawn Acquisitions have been consolidated since the respective acquisition dates. During 2021, revenue from AFF and the 2021 Pawn Acquisitions was $56.0 million and the net loss from AFF and the 2021 Pawn Acquisitions since the acquisition dates (including $11.9 million of transaction costs, net of tax) was approximately $41.0 million. Transaction costs associated with the AFF Acquisition and the 2021 Pawn Acquisitions were expensed as incurred and are presented in the consolidated statements of income as merger and acquisition expenses. These expenses include investment banking, legal, accounting and other related third-party costs, including preparation for regulatory filings. 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 |
The unaudited pro forma results have been adjusted with respect to certain aspects of the AFF Acquisition and 2021 Pawn Acquisitions primarily to reflect: •Depreciation and amortization expense that would have been recognized assuming fair value adjustments to the tangible and intangible assets acquired and liabilities assumed; •An increase in total indebtedness primarily incurred to finance certain cash payments and transaction costs related to the AFF Acquisition and 2021 Pawn Acquisitions, partially offset by the elimination of AFF’s pre-existing debt that was repaid at closing; •The inclusion in the year ended December 31, 2020 of $15.4 million in acquisition expenses incurred by the Company (excluded from the year ended December 31, 2021); and •The exclusion of $44.3 million of loan loss provision expense in the year ended December 31, 2021 resulting from the establishment of the initial allowance for expected lifetime credit losses for non-PCD finance receivables acquired in the AFF Acquisition. The pro forma financial information has been prepared for informational purposes only and does not include any anticipated synergies or other potential benefits of the AFF Acquisition and 2021 Pawn Acquisitions. It also does not give effect to certain future charges that the Company expects to incur in connection with the AFF Acquisition and 2021 Pawn Acquisitions, including, but not limited to, additional professional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs and costs related to consolidation of technology systems. Pro forma results do not purport to be indicative of what would have resulted had the acquisitions occurred on the date indicated or what may result in the future.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 + Details
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