Rent-A-Center to tap credit facility to help fund Rainbow acquisition

By Sara Rosenberg

New York, Feb. 4 - Rent-A-Center Inc. plans to use availability under its senior credit facility and cash on hand to fund the acquisition of Rainbow Rentals Inc. for $16.00 in cash per share of Rainbow common stock, according to a company news release.

The acquisition is expected to be completed in the second quarter of 2004.

"We are very excited about this acquisition of Rainbow," said Mark E. Speese, chairman of the board and chief executive officer. "The operating philosophies of Rent-A-Center and Rainbow are similar and, given our track record of successfully integrating acquisitions and our proven business model, we believe that this transaction will create additional value for our stockholders.

"Furthermore, we expect to realize cost savings in advertising, purchasing of rental merchandise and overhead. As a result, following an initial transition period, we believe the transaction will be accretive to our 2004 earnings per share with additional accretion thereafter."

Rent-A-Center is a Plano, Texas, rent-to-own company.

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