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Acquisitions | 9 Months Ended
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Jun. 30, 2013
Business Combinations [Abstract] |
ACQUISITIONS | NOTE 3: ACQUISITIONS Go Cash On November 20, 2012, we entered into a definitive agreement with Go Cash, LLC and certain of its affiliates ("Go Cash") to acquire substantially all the assets of Go Cash's online lending business. This acquisition of assets was completed on December 20, 2012 and accounted for as a business combination. No liabilities were assumed other than trade payables and accounts payable incurred prior to closing in the ordinary course of business, which were approximately $0.2 million. The assets acquired include a proprietary software platform, including a loan management system and a lending decision science engine, that will enable geographic expansion both within the U.S. and internationally; an internal customer service and collections call center; a portion of the existing Go Cash multi-state loan portfolio; and related assets, including customer lists, customer data and customer transaction information. We hired substantially all of Go Cash's employees, including the management team, an internal underwriting and customer experience analytics team, and an experienced customer service and collections call center team. The total purchase price is performance-based and will be determined over a period of four years following the closing. A minimum of $50.8 million will be paid, of which $27.8 million was paid at closing, $11.0 million will be paid on November 10, 2013, $6.0 million will be paid on November 10, 2014, and $6.0 million will be paid on November 10, 2015. The performance consideration element will be based on the net income generated by the "Post-Closing Business Unit" (which will include all of our online consumer lending business). Within a specified period after the end of each of the first four years following the closing, we will make a contingent supplemental payment equal to the difference between (a) the adjusted net income for such year, multiplied by 6.0, and (b) all consideration payments previously paid. Each payment may be made, in our sole discretion, in cash or in the form of shares of EZCORP Class A Non-Voting Common Stock. The initial payment was made in the form of 1,400,198 shares of EZCORP Class A Non-Voting Common Stock. The contingent consideration element of the purchase price, which is the amount in excess of the guaranteed $50.8 million, has been preliminarily valued at zero as of June 30, 2013. The three and nine month periods ended June 30, 2013 include $2.3 million and $3.9 million in total revenues and $2.4 million and $5.6 million in operating losses related to EZCORP Online. TUYO On November 1, 2012, we acquired a 51% interest in Renueva Comercial S.A. de C.V., a company headquartered in Mexico City and doing business under the name “TUYO”, for approximately $1.1 million. As of June 30, 2013, TUYO owned and operated 19 stores in Mexico City and the surrounding metropolitan area. In these stores, TUYO buys quality used merchandise from customers and then resells that merchandise to other customers. TUYO also sells refurbished or other merchandise acquired in bulk from wholesalers. As this acquisition was individually immaterial, we present its related information, other than information related to the redeemable noncontrolling interest, on a consolidated basis. Pursuant to the acquisition agreement, the sellers have a put option with respect to their remaining shares of TUYO. The sellers have the right to sell their TUYO shares to EZCORP during a specified exercise period, with specified limitations on the number of shares that may be sold within a consecutive 12-month period. Under the guidance in ASC 480-10-S99, securities that are redeemable for cash or other assets are to be classified outside of permanent equity; therefore, we have included the redeemable noncontrolling interest related to TUYO in temporary equity. The fair value of the TUYO redeemable noncontrolling interest was estimated by applying an income and market approach. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Key assumptions include discount rates of 10% and 18% representing discounts for lack of control and lack of marketability respectively that market participants would consider when estimating the fair value of the noncontrolling interest. The fair market value of TUYO was determined using a multiple of future earnings. We expect the recorded values related to the noncontrolling interest at June 30, 2013 to approximate fair value. Other On April 26, 2013, Grupo Finmart, our 60% owned subsidiary, purchased 100% of the outstanding shares of Fondo ACH, S.A. de C.V., a specialty consumer finance company. The total purchase price is performance-based and will be determined over a period of four years. A minimum of $3.5 million will be paid, of which $2.7 million was paid at closing with the remaining due on January 2, 2017. The performance consideration element will be based on interest income generated by the acquired portfolios and new loans made through Fondo ACH's contractual relationships. The contingent consideration element of the purchase price, which is the amount in excess of the guaranteed $3.5 million, has been preliminarily valued at zero as of June 30, 2013. As this acquisition was individually immaterial, we present its related information on a consolidated basis. On June 30, 2013, Grupo Finmart, purchased a consumer loan portfolio for total consideration of approximately $1.3 million. The total purchase price is performance-based and will be determined over the life of the loan portfolio. As this acquisition was individually immaterial, we present its related information on a consolidated basis. The nine-month period ended June 30, 2013, includes the December 2012 acquisition of 12 pawn locations in Arizona, which was a new state of operation for EZCORP. As this acquisition was individually immaterial, we present its related information on a consolidated basis. The following tables provide information related to the acquisitions of domestic and foreign retail and financial services locations during the nine months ended June 30, 2013:
| Nine Months Ended June 30, 2013
| Go Cash |  | Other Acquisitions
Number of asset purchase acquisitions | 1 |  |  | 1 |
Number of stock purchase acquisitions | — |  |  | 3 |
U.S. stores acquired | — |  |  | 12 |
Foreign stores acquired | — |  |  | 26 |
Total stores acquired | — |  |  | 38 |
| Nine Months Ended June 30, 2013
| Go Cash |  | Other Acquisitions
| (in thousands)
Consideration: |  |  |
Cash | $ | — |  |  | $ | 17,980 |
Equity instruments | 27,776 |  |  | 10,929 |
Contingent consideration | — |  |  | 248 |
Deferred consideration | 23,000 |  |  | 2,872 |
Fair value of total consideration transferred | 50,776 |  |  | 32,029 |
Cash acquired | — |  |  | (3,040 | )
Total purchase price | $ | 50,776 |  |  | $ | 28,989 |
| Nine Months Ended June 30, 2013
| Go Cash |  | Other Acquisitions
| (in thousands)
Current assets: |  |  |
Pawn loans | $ | — |  |  | $ | 5,714 |
Consumer loans, net | — |  |  | 902 |
Service charges and fees receivable, net | 23 |  |  | 714 |
Inventory, net | — |  |  | 2,441 |
Prepaid expenses and other assets | 120 |  |  | 508 |
Total current assets | 143 |  |  | 10,279 |
Property and equipment, net | 268 |  |  | 1,078 |
Goodwill | 38,128 |  |  | 17,187 |
Intangible assets | 12,315 |  |  | 619 |
Non-current consumer loans, net | — |  |  | 3,011 |
Other assets | 124 |  |  | 314 |
Total assets | 50,978 |  |  | 32,488 |
Current liabilities: |  |  |
Accounts payable and other accrued expenses | 202 |  |  | 560 |
Customer layaway deposits | — |  |  | 103 |
Total current liabilities | 202 |  |  | 663 |
Total liabilities | 202 |  |  | 663 |
Redeemable noncontrolling interest | — |  |  | 2,836 |
Net assets acquired | $ | 50,776 |  |  | $ | 28,989 |
Goodwill deductible for tax purposes | $ | 38,128 |  |  | $ | — |
Indefinite-lived intangible assets acquired: |  |  |
Domain name | $ | 215 |  |  | $ | — |
Definite-lived intangible assets acquired (1): |  |  |
Non-compete agreements | $ | — |  |  | $ | 30 |
Internally developed software | $ | 12,100 |  |  | $ | 66 |
Contractual relationship | $ | — |  |  | $ | 523 |
(1) The weighted average useful life of definite-lived intangible assets acquired is five years. All acquisitions were made as part of our continuing strategy to enhance and diversify our earnings over the long-term. The factors contributing to the recognition of goodwill were based on several strategic and synergistic benefits we expect to realize from the acquisitions. These benefits include our initial entry into several markets and a greater presence in others, as well as the ability to further leverage our expense structure through increased scale. The purchase price allocation of assets acquired in the most recent twelve month period is preliminary as we continue to receive information regarding the acquired assets. Transaction related expenses for the nine-month periods ended June 30, 2013 and 2012 of approximately $0.5 million and $1.7 million, respectively, were expensed as incurred and recorded as administrative expenses. These amounts exclude costs related to transactions that did not close and future acquisitions. The results of all acquisitions have been consolidated with our results since their respective closing. Pro forma results of operations have not been presented because it is impracticable to do so, as historical audited financial statements in U.S. GAAP are not readily available. Grupo Finmart On January 30, 2012, we acquired a 60% interest in Grupo Finmart (formerly known as Crediamigo), a specialty consumer finance company headquartered in Mexico City, with 45 loan servicing locations throughout the country, for total consideration of $60.1 million, net of cash acquired. This amount includes contingent consideration related to two earn out payments. If certain financial performance targets are achieved, during calendar years 2012 and 2013, we will make a payment to the sellers of $12.0 million, each year, for a total amount of $24.0 million. The Grupo Finmart purchase price allocation presented below includes a fair value amount of $23.0 million attributable to the contingent consideration payments. The first contingent consideration payment of approximately $12.0 million was paid in April 2013. Pursuant to the Master Transaction Agreement, the sellers have a put option with respect to their remaining shares of Grupo Finmart. Under the guidance in ASC 480-10-S99, securities that are redeemable for cash or other assets are to be classified outside of permanent equity; therefore, we have included the redeemable noncontrolling interest related to Grupo Finmart in temporary equity. The fair value of the Grupo Finmart redeemable noncontrolling interest was estimated by applying an income and market approach. This fair value measurement at acquisition was based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. We expect the recorded values related to the noncontrolling interest at June 30, 2013 to approximate fair value. Cash Genie On April 14, 2012, we acquired a 72% interest in Ariste Holding Limited and its affiliates, which provides online loans in the U.K. under the name "Cash Genie." As this acquisition was individually immaterial, we present its related information, other than information related to the redeemable noncontrolling interest, on a combined basis. Pursuant to the acquisition agreement, the sellers have a put option with respect to their remaining shares of Cash Genie. Each seller has the right to sell their Cash Genie shares to EZCORP during the exercise period. Under the guidance in ASC 480-10-S99, securities that are redeemable for cash or other assets are to be classified outside of permanent equity; therefore, we have included the redeemable noncontrolling interest related to Cash Genie in temporary equity. On November 14, 2012, a seller exercised his option with respect to his remaining shares. This transaction increased our ownership percentage to 95%, and was treated as an equity transaction and not an adjustment to the purchase price of our initial controlling interest acquisition of Cash Genie. The details of the transaction are described further in Note 9. On August 1, 2013, a seller exercised his option with respect to his remaining shares. As of August 1, 2013, we own 100% of Cash Genie's ordinary shares. The details of the transaction are described further in Note 18. Other In fiscal 2012, we acquired 50 locations in the U.S. and one in Canada. As these acquisitions were individually immaterial, we present their related information on a consolidated basis. The following table provides information related to the acquisitions of domestic and foreign retail and financial services locations in fiscal 2012:
| Fiscal Year Ended September 30, 2012
| Grupo Finmart |  | Other Acquisitions
| (in thousands)
Current assets: |  |  |
Pawn loans | $ | — |  |  | $ | 6,781 |
Consumer loans, net | 8,935 |  |  | 3,641 |
Service charges and fees receivable, net | 18,844 |  |  | 1,940 |
Inventory, net | — |  |  | 5,911 |
Deferred tax asset | — |  |  | 238 |
Prepaid expenses and other assets | 3,543 |  |  | 204 |
Total current assets | 31,322 |  |  | 18,715 |
Property and equipment, net | 2,326 |  |  | 4,061 |
Goodwill | 99,486 |  |  | 99,747 |
Non-current consumer loans, net | 56,120 |  |  | — |
Intangible assets | 16,400 |  |  | 3,980 |
Other assets | 7,497 |  |  | 294 |
Total assets | 213,151 |  |  | 126,797 |
Current liabilities: |  |  |
Accounts payable and other accrued expenses | 6,853 |  |  | 5,496 |
Customer layaway deposits | — |  |  | 808 |
Current maturities of long-term debt | 22,810 |  |  | — |
Other current liabilities | — |  |  | 257 |
Total current liabilities | 29,663 |  |  | 6,561 |
Long-term debt, less current maturities | 86,872 |  |  | — |
Deferred tax liability | 171 |  |  | 113 |
Total liabilities | 116,706 |  |  | 6,674 |
Redeemable noncontrolling interest | 36,300 |  |  | 9,557 |
Net assets acquired | $ | 60,145 |  |  | $ | 110,566 |
Per FASB ASC 805-10-25, adjustments to provisional purchase price allocation amounts made during the measurement period, shall be recorded as if the accounting for the business combination had been completed at the acquisition date. Thus, the acquirer shall revise comparative information for prior periods presented in financial statements. The amounts above and our consolidated balance sheet as of June 30, 2012 reflect all measurement period adjustments recorded since the acquisition date. These adjustments include a $0.3 million decrease in current assets, a $47.0 million decrease in other assets, a $1.4 million decrease in current liabilities, and a $1.0 million decrease in long-term liabilities, for a net change in goodwill of $44.9 million.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1524-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1383-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph F4 -Subparagraph e -Appendix F Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141 -Paragraph 51, 52 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 88-16 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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