initial public offerings (IPOs) trading on American exchanges

Thursday, April 10, 2014

Enova planning an IPO

Enova International Inc., the leading online payday lender in the U.S., is on course for a tax-free spinoff later this year that would establish a publicly traded headquarters company based in Chicago.

Fort Worth, Texas-based Cash America Inc., which owns Enova, announced today that its board has authorized management to explore a spinoff of Enova. If it decides to go forward, Cash America expects to complete the spinoff in late 2014 or early 2015, according to the disclosure with the Securities and Exchange Commission.

Enova CEO David Fisher, former CEO of Chicago online brokerage OptionsXpress, would continue to lead Enova once the separation occurs, Cash America said.

Enova employs more than 1,100 in the Chicago area, most of them downtown, and generated $766 million in revenue last year.

The fast-growing company makes loans online to borrowers, often with tarnished credit, who have pressing short-term cash needs. It operates in the U.S., Great Britain, Australia and Canada.
Cash America operates storefront pawn shops all over the U.S.

ALLOWING FOR 'E-COMMERCE EXPANSION'

In a release, Cash America CEO Daniel Feehan said: “We now think that pursuing a separation of the businesses and management teams into two discrete companies is potentially very beneficial to the operating activities and ongoing strategy of each business. . . .The move would allow Enova to optimize its performance and provide greater flexibility to pursue its own e-commerce expansion opportunities.”

Cash America emphasized that there was no assurance the spinoff would occur, citing the potential for “external events beyond the control of Cash America and Enova.”

Regulatory scrutiny is a particular risk for Enova. The federal Consumer Financial Protection Bureau is probing online lending and late last year ordered Cash America to pay $19 million in fines and refunds due mainly to issues at Enova.

Cash America attempted to spin off Enova in 2012 in a $500 million initial public offering but withdrew it when market conditions for IPOs worsened.

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