Curo (CURO) up 95% on Katapult SPAC merger

Shares of Curo (CURO) has risen over 95% on the announcement of Katapult SPAC merger with FinServ Acquisition.

The company today announced that it will benefit from merger of Katapult and FinServ Acquisition. Based on CURO’s ownership in Katapult, the transaction announced today will provide consideration consisting of a combination of cash and stock in the new company to CURO of $365 million, which includes an earnout of up to $30 million in the form of additional common shares in the new public company. To date, CURO has made a total cash investment in Katapult of $27.5 million.

We first began investing in Katapult in 2017 as we identified multiple catalysts for future success–an innovative e-commerce POS business model, a focus on the vast and underpenetrated non-prime financing market and a clear and compelling value proposition for merchants and consumers. We have enjoyed partnering with Katapult’s experienced and talented management team and are proud of the milestones they have achieved to make today’s announcement possible,” said Don Gayhardt, President and Chief Executive Officer of CURO and member of the Board of Directors of Katapult. “Katapult’s CEO Orlando Zayas and the company’s management team are first-rate and we believe that Katapult is well positioned to continue to succeed as a public company with even greater access to capital, an enhanced brand and an accelerated growth trajectory.”

“This transaction is a clear win for CURO and its shareholders. When closed, the transaction will increase our cash balances, providing greater balance sheet flexibility for potential opportunities including strategic M&A that will expand our product offerings and market reach. Furthermore, we will retain a meaningful equity stake in Katapult and have board representation in the newly public company. This gives us the opportunity to continue participating in the future direction of Katapult, as the company advances its position as the leading e-commerce POS financing platform focused on non-prime consumers,” Gayhardt concluded.

Upon the closing of the transaction, CURO anticipates receiving cash of up to $125 million and maintaining an ownership stake of at least 21% of the fully-diluted shares of the new public company. The final consideration mix between cash and stock will vary based on SPAC investor redemptions and certain other adjustments. The transaction is expected to close during the first half of 2021 and remains subject to approval by FinServ stockholders and other customary closing conditions. As detailed in the press release from Katapult and FinServ, the Boards of Directors of both Katapult and FinServ have unanimously approved the transaction.

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Jay Lorrence
Investor of 12 years and Managing Editor of Money Midnight, a news outlet focused on highly profitable investment ideas and bold underground research.
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