Source: Investing Posted 13/12/2024, 01:08
PLANO, Texas – Upbound Group, Inc. (NASDAQ: UPBD), a provider of underserved consumer financial products with a market capitalization of $1.84 billion and strong revenue growth of 7.43% over the past twelve months, announced the acquisition of Brigit., a financial health technology company, for up to $460 million in a mix of cash and stocks.
According to Investing’s analysis, Upbound maintains strong financial health with a trading ratio of 3.51, indicating a strong ability to execute such strategic steps. The acquisition is expected to be completed in the first quarter of 2025.
and will strengthen Uppound’s technology-driven financial solutions and expand its customer base. Brigitte’s subscription-based platform, launched in 2019, focuses on financial inclusion and has saved users nearly a billion dollars in overdraft fees through its instant cash advances product.
The company also offers resources for building credit and financial well-being, serving nearly two million monthly active customers.
including more than one million paid subscribers. InvestingPro data shows up bound is currently trading below its fair value, suggesting a potential for a rise from this strategic acquisition. Subscribers have access to detailed evaluation metrics and 6 additional professional tips on Upbound’s growth prospects.
Upbound CEO Mitch Vadil expressed enthusiasm for the alignment of tasks between the two companies.
emphasizing Upbound’s market expansion and product innovation. Zubin Matthews, co-founder and CEO of Brigitte, highlighted joint efforts to serve Americans who are not adequately served by traditional financial institutions.
The transaction consists of $325 million at closing, a deferred cash consideration of $75 million over two years.
and up to $60 million in cash based on Brigitte’s financial performance in 2026. With earnings before interest, tax, depreciation and amortization (EBITDA) of $413.54 million and strong support from analysts, including 4 recent upward earnings reviews, Upbound looks in G position.d) To finance the transaction with available cash, credit facilities.
and the issuance of ordinary shares to Uppound.
For a comprehensive analysis of Uppound’s financial position and growth trajectory.
investors can access the detailed professional research report available on InvestingPro.
Uppound expects the acquisition to increase its adjusted earnings before interest, tax, depreciation.
and amortization by $25 million to $30 million in 2025 and by $70 million to $80 million in 2026. The acquisition will also remain neutral for non-GAAP EPS in the first year and become positive thereafter.
Brigitte will retain its brand based in New York City, becoming Upbound’s innovation hub. The combined company aims to leverage Brigitte’s AI and machine learning models to improve customer experience and financial solutions.
Upbound Group reported stable performance in the third quarter 2024 earnings call. The company’s revenue approached $1.1 billion, with the Acima segment leading with 19% year-on-year growth. Despite challenges such as increased write-off rates and low gross profit margin.
Upbound Group remains focused on customer retention and digital improvements.
Among recent developments, the company is looking to expand into Mexico and expects to meet full annual revenue guidelines of $4.2 billion to $4.3 billion. Adjusted EBITDA is expected to be between $470 million and $480 million.
with liquidity close to $600 million at the end of the third quarter.
