Ezcorp Pawns Itself

EZCORP (EZPW) announced the completion of its acquisition of Value Financial Services. This on again off again deal finally closed on Dec 31, 2008. The deal has an interesting dynamic. A pawn shop has bought a pawn shop and then pawned itself to help pay for the deal. It’s all so Wall Street on a gritty level.

Value was privately held but had some market position. EZCORP had an excellent balance sheet and respectable cash flow and has now leveraged itself.

EZCORP says the deal will be mildly accretive in 2009. They did have to use a $40 million term loan. No details on the term loan were disclosed. There is also a $80 million operating loan. No terms were disclosed. So that’s $120 million of pawn and we do not know what the pawn ticket says.