Vintage Rodeo gets $800 million commitment to acquire Rent-A-Center

By Wendy Van Sickle

Columbus, Ohio, June 20 – Vintage Rodeo Acquisition, Inc. entered into a debt commitment letter dated June 17 with joint lead arrangers and joint bookrunners B. Riley Financial, Inc. and Guggenheim Corporate Funding, LLC for an $800 million senior secured term loan facility to be provided concurrently with the closing of Vintage Rodeo Parent, LLC’s acquisition of Rent-A-Center Inc., according to an 8-K filing with the Securities and Exchange Commission.

The term loan facility consists of a four-year $400 million first-out term loan to be provided by Guggenheim, a five-year $250 million second-out term loan and a five-year $150 million last-out term loan to be provided by B. Riley.

Additionally, GACP Finance Co., LLC, a subsidiary of B. Riley, has agreed to provide Vintage Rodeo Acquisition with a $275 million term loan secured by a first priority lien on some specified leasing contracts and related collateral.

Guggenheim will act as administrative agent and B. Riley will act as collateral agent for the term loan facility.

All borrowings under the term loan facilities will be made in a single drawing on the closing date.

Borrowings will bear interest at Libor plus 550 basis points for the first-out loans, Libor plus 700 bps for the second-out loans and Libor plus 900 bps for the last-out loans.

Regularly scheduled principal payments will be required in quarterly installments and will be applied first to the first-out term loan until paid in full, second to the second-out term loan until paid in full, and third to the last-out term loan until paid in full.

Under the merger agreement, Rent-A-Center is being bought for $15.00 per share in cash. The transaction represents a total consideration of about $1,365,000,000, including net debt, as previously reported.

Closing is expected by the end of the year, subject to customary conditions including the receipt of stockholder and regulatory approvals.

Vintage Rodeo is an affiliate of Vintage Capital Management LLC, an Orlando, Fla.-based private equity firm. Rent-A-Center is a Plano, Texas-based rent-to-own operator.

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