Cash Converters Targets $25M Equity Raise to Acquire 29 Stores at $0.305 Each

• Fully underwritten $25 million equity raising
• Acquisition of 29 Australian franchise stores for $37 million
• Offer price set at $0.305 per new share, a ~12.86% discount
• EZCORP commits to full subscription and sub-underwriting
• Retail entitlement offer opens 3 November, closes 17 November 2025

Equity Raising to Fuel Expansion

Cash Converters International Limited (ASX, CCV) has launched a significant capital raise, targeting approximately $25 million before costs. The equity raising comprises a fully underwritten $5 million placement to institutional investors and a partially underwritten $20 million accelerated non-renounceable entitlement offer at $0.305 per new share. This initiative is designed to fund the company’s strategic acquisition of a 29-store franchise network across Queensland, New South Wales, the Australian Capital Territory, and Tasmania.

Strategic Acquisition Details

The targeted franchise network, collectively known as the Cash Converters Investment Group, is being acquired for $37 million in cash, subject to customary completion adjustments. The acquisition is expected to be earnings accretive in the first full year of ownership, based on a blended earnings multiple of 4.5 times actual FY25 EBITDA. This move will expand Cash Converters’ corporate store footprint from 92 to 121 stores, strengthening its presence along Australia’s populous East Coast and unlocking operational synergies.

Support from Major Shareholder EZCORP

EZCORP, the company’s largest shareholder with a 43.65% stake, has expressed strong support for the equity raising. It has committed to fully subscribe for its entitlement under the institutional offer, amounting to approximately $8.73 million, and agreed to sub-underwrite up to $2.18 million of the retail entitlement offer. This commitment underscores confidence in the acquisition’s strategic value and the company’s growth trajectory.

Offer Mechanics and Timetable

The entitlement offer allows eligible shareholders to subscribe for one new share for every 9.57 shares held as of the record date, 29 October 2025. The offer price represents an 11.54% discount to the theoretical ex-rights price and a 12.86% discount to the last traded price prior to the announcement. The retail entitlement offer opens on 3 November 2025 and closes on 17 November 2025, with new shares expected to commence trading on 25 November 2025.

Risks and Conditions

The acquisition is subject to several conditions precedent, including due diligence, execution of formal agreements, landlord consents, employee transfer acceptance, and successful completion of the equity raising. Should the acquisition not proceed, the company may redirect the raised funds towards future store acquisitions consistent with its growth strategy. Investors should consider the risks outlined in the company’s investor presentation, including market conditions and operational integration challenges.

Looking Ahead

Cash Converters’ move to acquire a substantial franchise network and the accompanying equity raise signal a decisive step in its strategy to grow its corporate store base and enhance earnings. The involvement of EZCORP and the underwriting arrangements provide a degree of execution certainty, though market participants will be watching closely for retail offer subscription outcomes and the finalisation of the acquisition.

Bottom Line?

Cash Converters’ $25 million equity raise and franchise acquisition mark a pivotal growth phase, but completion risks and market reception remain key watchpoints.

Questions in the middle?

• Will the retail entitlement offer achieve full subscription given market conditions?
• How will the acquisition integration impact Cash Converters’ operational efficiency and earnings?
• What alternative uses might the company pursue if the acquisition does not complete?