Rent-to-own News - Aaron's inks $15 million deal for British RTO interest

Aaron’s -- the country's second largest rent to own company -- today announced it has reached an agreement to purchase 11.5 percent of Perfect Home Holdings Limited, a privately-held U.K. rent-to-own company, in a move that will allow that company to grow stores and provide Aaron's with inside market information that could accelerate "future expansion" across the Atlantic.

Perfect Home Holdings, which operates under the PerfectHome brand, was founded in 2006 and provides basic home furnishings in the U.K. to the non-standard credit market. Based near Birmingham, PerfectHome currently has 45 stores open throughout England and has plans to approximately double the number of stores over the next several years.

Aaron’s will pay approximately $15.4 million at current exchange rates, for its interest in PerfectHome and will have an option to increase its ownership in the future. The funds will be primarily used by PerfectHome to accelerate the growth of its store openings. The closing of the transaction requires regulatory approval which is currently being sought. The transaction will be effective only following Aaron’s obtaining such approval. The investment will be recorded as an asset on Aaron’s balance sheet.

“We are very excited about this investment in PerfectHome,” said Robert C. Loudermilk, Jr., president and CEO of Aaron’s. “Not only will it provide PerfectHome growth capital, it will also enable Aaron’s to learn about the U.K. market for possible future expansion there and perhaps provide an eventual gateway into other European markets. Although we feel our growth prospects remain excellent in the U.S., we plan to further explore international opportunities that could complement domestic growth.”

Aaron’s, Inc., based in Atlanta, currently has more than 1,900 Company-operated and franchised stores in 48 states and Canada.  The Company’s Woodhaven Furniture Industries division manufactured approximately $79 million, at cost, of furniture and bedding in 2010 and currently has plants at 13 facilities in eight states.  The entire production of Woodhaven is for shipment to Aaron’s stores.