First Cash Financial Services Inc., an Arlington, Tex.-based Pawn shop operator, announced today that it has purchased Auto Master, a privately owned car dealer and lender, for $33.7 million in cash and debt.
Auto Master, with $44 million in revenue in 2005, is a car dealer focusing exclusively on the “buy-here/pay-here” used car market, which means the company lends directly to the buyer.
Auto Master is based in Arkansas and operates dealerships in Arkansas, Missouri and Tulsa.
First Cash said the “buy-here/pay-here” industry is fragmented and poorly financed, giving larger companies an opportunity to grab market share through better advertising, inventory selection and resources for consumer financing. First Cash said it plans to open at least three to five new “buy-here/pay-here” dealerships by the end of 2007.
First Cash is financing the acquisition with cash, borrowings from a credit facility and notes payable to the sellers. The company expanded its available credit line to a maximum of $50 million from $25 million.