Atlanticus Sells Specialty Finance Unit to Fortress

Ticker: ATLCZ · Form: 8-K · Filed: Jul 23, 2024 · CIK: 1464343

Atlanticus Holdings CORP 8-K Filing Summary
FieldDetail
CompanyAtlanticus Holdings CORP (ATLCZ)
Form Type8-K
Filed DateJul 23, 2024
Risk Levelmedium
Pages5
Reading Time6 min
Key Dollar Amounts$57,250,000, $351 million, $2,415 million, $1,879 million, $316 million
Sentimentneutral

Sentiment: neutral

Topics: divestiture, acquisition, strategy

Related Tickers: ATLC

TL;DR

Atlanticus selling off a subsidiary to Fortress, focusing on core lending.

AI Summary

Atlanticus Holdings Corp. announced on July 23, 2024, that it has entered into a definitive agreement to sell its subsidiary, Atlanticus Specialty Finance, LLC, to an affiliate of Fortress Investment Group. The transaction is expected to close in the third quarter of 2024 and is subject to customary closing conditions. This divestiture is part of Atlanticus' strategy to focus on its core consumer lending business.

Why It Matters

This sale allows Atlanticus Holdings to streamline its operations and concentrate on its primary consumer lending activities, potentially improving financial performance and strategic focus.

Risk Assessment

Risk Level: medium — The sale of a subsidiary introduces execution risk and potential impacts on future revenue streams, while the reliance on Fortress's closing conditions adds uncertainty.

Key Players & Entities

FAQ

What is the name of the subsidiary Atlanticus Holdings Corp. is selling?

Atlanticus Holdings Corp. is selling its subsidiary, Atlanticus Specialty Finance, LLC.

Who is the buyer of Atlanticus Specialty Finance, LLC?

The buyer is an affiliate of Fortress Investment Group.

When is the transaction expected to close?

The transaction is expected to close in the third quarter of 2024.

What is the primary reason for this divestiture?

The divestiture is part of Atlanticus' strategy to focus on its core consumer lending business.

What are the conditions for closing the sale?

The transaction is subject to customary closing conditions.

Filing Stats: 1,495 words · 6 min read · ~5 pages · Grade level 12.5 · Accepted 2024-07-23 16:32:19

Key Financial Figures

Filing Documents

02. Results of Operations and Financial Condition

Item 2.02. Results of Operations and Financial Condition. The preliminary financial information as of June 30, 2024, and for the quarter then ended, set forth under Item 8.01 below is incorporated into this Item 2.02 by reference.

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. On July 23, 2024, Atlanticus Holdings Corporation (the "Company") issued a press release (the "Press Release") announcing that it has commenced an underwritten registered public add-on offering (the "Add-On Offering") of its 9.25% Senior Notes due 2029 (the "Additional Notes"). The Additional Notes from the Add-On Offering are an additional issue of our $57,250,000 aggregate principal amount of 9.25% Senior Notes due 2029 that the Company sold in January and February 2024 (the "Existing Notes"). The Additional Notes will be treated as a single series with the Existing Notes and will have the same terms as the Existing Notes (other than with respect to the price to the public, the issue date and the initial interest payment date). The Additional Notes will have the same CUSIP number and will be fungible and rank equally with the Existing Notes. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. On July 23, 2024, the Company released an investor presentation that will be used by the Company with respect to the Add-On Offering (the "Investor Presentation"). A copy of the Investor Presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to this Item 7.01, Exhibit 99.1 and Exhibit 99.2 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

01. Other Events

Item 8.01. Other Events. On July 23, 2024, the Company filed a preliminary prospectus supplement with the Securities and Exchange Commission (the "Commission") under its effective shelf registration statement on Form S-3 (Registration No. 333-279345) (the "Preliminary Prospectus Supplement") in connection with the Add-On Offering. The Preliminary Prospectus Supplement contains preliminary financial information as of June 30, 2024, and for the quarter then ended, including the following: Unrestricted cash and cash equivalents: Approximately $351 million Aggregate unpaid gross balance of loans at fair value: Approximately $2,415 million Notes payable, net: Approximately $1,879 million Total revenue: Approximately $316 million Net income attributable to common shareholders: In the range of $17-18 million The preparation of financial statements for the Company for the quarter ended June 30, 2024, is not yet complete. Accordingly, the preliminary financial information presented in the Preliminary Prospectus Supplement and this Item 8.01 reflects the Company's estimates of certain financial information as of June 30, 2024 and for the quarter then ended. Management believes the preliminary financial information is reasonable under the circumstances and reflects management's estimates based solely upon information available as of the date of this Current Report on Form 8-K. These estimates are not meant to be a comprehensive statement of the Company's results for this period and should not be viewed as a substitute for financial statements prepared in accordance with applicable accounting standards. Accordingly, you should not place undue reliance on these estimates. Cautionary Statement Regarding Forward-Looking Statements This Current Report on Form 8-K contains forward-looking statements that reflect the Company ' s current views with respect to, among other things, its business, operations, financial performance and preliminary financial information as of Ju

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 99.1 Launch Press Release, dated July 23, 2024. 99.2 Investor Presentation, dated July 23, 2024. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Atlanticus Holdings Corporation Date: July 23, 2024 By: /s/ William R. McCamey Name: William R. McCamey Title: Chief Financial Officer

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