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Friday, February 17, 2012

Payday Lender Stocks Shoot Up On Word Of Mexican Billionaire's Acquisition: Will Suitors Come Wooing Cincy's Check 'n Go Chain?

Big Money Courting the Payday Lenders
By James McNair
Daily Bellwether Contributor
CINCINNATI (TDB) -- With a Mexican billionaire agreeing to pay $655 million for a local payday lending operation's biggest competitor, one has to wonder if the folks at Kenwood-based Check ‘n Go are pondering a massive payday of their own.

Yesterday, it was announced that Advance America Cash Advance Centers Inc., the big dog in the world of payday lending, agreed to be bought by Grupo Elektra, a Mexico City retailer/banker controlled by billionaire Ricardo Salinas.  Forbes says Salinas is worth about $8.2 billion.  Advance America, based in Spartanburg, S.C., is publicly owned.  It stock was waffling along at the $8 mark before Wall Street learned about the buyout.  By the close ot trading yesterday, it shot up 33 percent to $10.44 a share and was the biggest gainer in the U.S. stock market. And the shares of other payday lenders also got a lift -- Cash America, DFC Global, EZ Corp., First Cash Financial and QC Holdings were all juiced yesterday.

Check ‘n Go -- part of Axcess Financial Services -- is privately owned, controlled by brothers David and Jared Davis. As such, it doesn’t disclose its annual revenue, but it is a sizable enterprise. Its website,, offers an out-of-date (2009) count of “nearly 1,300” stores in 31 states, while says it also owns more than 140 Cheque Centre stores in Scotland, England and Wales.  Advance America has 2,600 stores, so Grupo Elektra is paying about $252,000 per store. Strictly on an off-the-cuff basis (since we don’t know Check ‘n Go’s revenue, or debt situation for that matter), Check ‘n Go would be worth about $363 million.

If any deep-pocketed types (Bain Capital, anyone?) haven’t scouted out Axcess/Check ‘n Go as an acquisition, it might be time for Axcess to go public. Billionaires don’t open their wallets for companies that aren’t going anywhere.

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