Cash America 2011 Annual Report Download - page 125

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
94
licensing and regulatory approvals; however, the Company assumed the economic benefits of these pawnshops by
operating them under a management arrangement that commenced on November 30, 2011. Pawn Partners operated a
seven-store chain of pawn lending locations as franchised Cash America locations under the name “SuperPawn.” The
seven locations are located in Tucson, Flagstaff and Yuma, Arizona. As of December 31, 2011 the Company had paid
aggregate consideration of $49.3 million with additional consideration of $4.3 million to be paid following the receipt
of applicable licensing and regulatory approvals. In addition, the Company incurred acquisition costs of $0.1 million
related to the acquisition, which are reflected in “Operations expenses” in the consolidated statements of income. The
goodwill of $26.7 million arising from the acquisition consists largely of the synergies and economies of scale
expected from combining the operations of the Company and Pawn Partners. As further described in Note 19, the
activities and goodwill related to the Pawn Partners acquisition are included in the results of the Company’s retail
services segment.
The purchase price of the Pawn Partners acquisition was allocated as follows (dollars in thousands):
Pawn loans $ 10,657
Merchandise acquired 5,485
Pawn loan fees and service charges receivable 1,424
Property and equipment 70
Goodwill 26,679
Intangible assets 9,570
Other liabilities (99)
Customer deposits (225)
Total consideration paid for acquisition, net of cash acquired $ 53,561
Cash consideration payable (4,300)
Total cash paid for acquisition, net of cash acquired $ 49,261
Maxit
Pursuant to its business strategy of expanding storefront operations in the United States, the Company’s
wholly-owned subsidiary, Cash America, Inc. of Nevada, completed the purchase of substantially all of the assets (the
"Maxit acquisition") of Maxit Financial, LLC ("Maxit") on October 4, 2010. Maxit owned and operated a 39-store
chain of pawn lending locations that operate in Washington and Arizona under the names “Maxit” and “Pawn X-
Change.” Per the terms of the Asset Purchase Agreement, the acquisition consideration consisted of a cash payment of
approximately $58.2 million, which was funded with borrowings under the Company's line of credit, and 366,097
shares of the Company's common stock, with a fair value of $10.9 million as of the closing date. In addition, the
Company incurred acquisition costs of $1.5 million related to the acquisition, which are reflected in "Operations
expenses" in the consolidated statements of income. The goodwill of $26.2 million arising from the acquisition
consists largely of the synergies and economies of scale expected from combining the operations of the Company and
Maxit. As further described in Note 19, the activities and goodwill of Maxit are included in the results of the
Company’s retail services segment.