ATLANTA – Furniture leasing company Aaron’s has agreed to buy online rent-to-own finance company Progressive Finance Holdings for $700 million in cash in a bid to turn around its business even as it cut its first-quarter outlook.
Meanwhile, Aaron’s also said it rejected a takeover offer from Vintage Capital Management, its second-largest shareholder, for $30.50 per share, a 1 percent premium on the stock’s closing price Monday.
Aaron’s sells and leases furniture and accessories and offers flexible payment plans for people with credit problems. It has several stores in Western New York.
Aaron’s says it expects the acquisition of Progressive, from Summit Partners, to help its earnings in 2014.
Aaron’s also cut its first-quarter revenue and earnings outlook, blaming the weather and difficult economic conditions.
The Atlanta-based company now expects earnings of 51 cents to 54 cents per share, down from 57 cents to 62 cents per share. It expects revenue of $587.5 million, down from $600 million.
Meanwhile, Aaron’s said in a letter to shareholders that Vintage, which has about a 10 percent stake in Aaron’s and has a slate of board candidates up for election at the company’s 2014 annual shareholder meeting, did not give Aaron’s details about how it planned to finance the bid.
Progressive provides lease-to-own programs for furniture, electronics and appliances via 5,500 retail partners.