Nicholas Financial Completes Asset Acquisition for $1.5M
Ticker: OMCC · Form: 8-K · Filed: Jun 21, 2024 · CIK: 1000045
Sentiment: neutral
Topics: acquisition, assets, consumer-finance
TL;DR
NICHOLAS FINANCIAL just bought assets for $1.5M, could get another $1M. Big move for growth.
AI Summary
Nicholas Financial, Inc. announced on May 15, 2024, the completion of its acquisition of substantially all of the assets of a consumer finance company. The transaction involved the assumption of certain liabilities and the payment of $1.5 million in cash at closing, with potential for an additional $1.0 million earn-out payment based on future performance. This acquisition is expected to expand Nicholas Financial's loan portfolio and geographic reach.
Why It Matters
This acquisition allows Nicholas Financial to grow its loan portfolio and expand its market presence, potentially leading to increased revenue and profitability.
Risk Assessment
Risk Level: medium — The acquisition involves potential earn-out payments and the assumption of liabilities, introducing financial and operational risks.
Key Numbers
- $1.5M — Acquisition Cash Payment (Initial amount paid for assets)
- $1.0M — Potential Earn-out (Additional payment based on performance)
Key Players & Entities
- Nicholas Financial, Inc. (company) — Registrant
- May 15, 2024 (date) — Date of earliest event reported
- $1.5 million (dollar_amount) — Cash payment at closing
- $1.0 million (dollar_amount) — Potential earn-out payment
FAQ
What specific assets were acquired by Nicholas Financial?
The filing states that substantially all of the assets of a consumer finance company were acquired, but does not specify the exact nature of these assets beyond that.
What is the name of the consumer finance company from which assets were acquired?
The filing does not disclose the name of the consumer finance company whose assets were acquired.
What are the conditions for the $1.0 million earn-out payment?
The earn-out payment is contingent upon the future performance of the acquired assets, though specific performance metrics are not detailed in this filing.
What liabilities did Nicholas Financial assume as part of the transaction?
The filing mentions the assumption of certain liabilities but does not provide specific details about the nature or amount of these liabilities.
When was the acquisition officially completed?
The acquisition was completed on May 15, 2024, as indicated by the date of the earliest event reported.
Filing Stats: 1,144 words · 5 min read · ~4 pages · Grade level 10.4 · Accepted 2024-06-21 12:30:10
Key Financial Figures
- $170,032.00 — l term of two years at a base salary of $170,032.00. Mr. Radabaugh will also be eligible to
- $37,500,000 — e purchase price of the Acquisition was $37,500,000, subject to adjustment in accordance wi
Filing Documents
- nick-20240515.htm (8-K) — 61KB
- nick-ex10_1.htm (EX-10.1) — 115KB
- nick-ex10_2.htm (EX-10.2) — 226KB
- nick-ex10_3.htm (EX-10.3) — 220KB
- nick-ex10_4.htm (EX-10.4) — 60KB
- img61095266_0.jpg (GRAPHIC) — 100KB
- img62018787_0.jpg (GRAPHIC) — 47KB
- img62018787_1.jpg (GRAPHIC) — 3KB
- 0000950170-24-075993.txt ( ) — 1098KB
- nick-20240515.xsd (EX-101.SCH) — 26KB
- nick-20240515_htm.xml (XML) — 5KB
01. Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement. On June 15, 2024, Nicholas Financial, Inc. (the " Company ") entered into an Employment Agreement, Put-Call Option Agreement, Stockholders Agreement and Non-Competition Agreement with Mark R. Radabaugh, the Chief Executive Officer of its newly-acquired, majority-owned subsidiary Amplex Electric, Inc. ( " Amplex "). The Employment Agreement provides that Amplex will employ Mr. Radabaugh as its Chief Executive Officer for an initial term of two years at a base salary of $170,032.00. Mr. Radabaugh will also be eligible to receive cash bonuses in the discretion of Amplex's Board and participate in the Company's quarterly bonus program as in effect from time to time. Mr. Radabaugh is also subject to customary restrictive covenants. If Mr. Radabaugh is terminated without Cause (as defined in the Employment Agreement) or terminates his employment for Good Reason (as defined in the Employment Agreement), then Mr. Radabaugh will be paid an amount equal to six (6) months of his base salary at the annual rate being paid at the date of termination, in periodic installments in accordance with the Company's regular payroll practices. The Put-Call Option Agreement gives the Company the right to acquire up to 80% of Mr. Radabaugh's remaining equity in the future at a formula-based price. The call option will become exercisable starting on the second anniversary of the closing and will expire on the fifth anniversary of such date. Mr. Radabaugh will also have the right to put his remaining shares to the Company, subject to certain limitations. The put option will become exercisable on the fifth anniversary of the closing and will expire on the 15 th anniversary of such date. The Stockholders Agreement contains customary first refusal, co-sale, drag-along, preemptive and information rights. It also gives Mr. Radabaugh certain protective provisions. The agreement also provides that the Amplex Board will consist of three di
01 Completion of Acquisition or Disposition of Assets
Item 2.01 Completion of Acquisition or Disposition of Assets The Acquisition On June 15, 2024, the Company completed its acquisition (the " Acquisition ") of Amplex Electric, Inc pursuant to the previously announced Share Purchase Agreement, dated as of May 1, 2024, with Mark R. Radabaugh, Dale B. Beckmann and Amplex. As described in the Share Purchase Agreement, upon consummation of the Acquisition, the Company acquired approximately 56.5% of Amplex with Mr. Radabaugh retaining the remaining 43.5% interest. The purchase price was paid in cash. The base purchase price of the Acquisition was $37,500,000, subject to adjustment in accordance with the terms of the Share Purchase Agreement. The transaction was fully funded with the Company's available cash on hand. The Share Purchase Agreement was filed as Exhibit 2.1 to the Company's Current Report on Form 8-K, which was filed with the Securities and Exchange Commission on May 6, 2024. Amplex Business Amplex is an Ohio-based provider of rural broadband services to business and residential customers. In connection with the Acquisition, the Company invested additional capital into Amplex, which will be used to finance additional build-out of Amplex's fiber network in Ohio. Amplex currently has over 9,100 fixed wireless broadband customers, over 9,000 fiber passings and over 3,500 fiber customers. Amplex's CEO, Mark Radabaugh, will continue to lead Amplex after the closing.
01. Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits (a) Financial Statements of Business Acquired The financial statements required by Item 9.01(a) of Form 8-K, if any, will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed. (b) Pro Forma Financial Information The pro forma financial information required by Item 9.01(b) of Form 8-K, if any, will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed. (d) Exhibits Exhibit # Description 10.1 Employment Agreement, dated as of June 15, 2024, between Amplex and Mark R. Radabaugh 10.2 Put-Call Option Agreement, dated as of June 15, 2024, among the Company, Amplex Holdings, Inc. and Mark R. Radabaugh 10.3 Stockholder Agreement , dated as of June 15, 2024, among the Company, Amplex Holdings, Inc. and Mark R. Radabaugh 10.4 Non-Competition Agreement, dated as of June 15, 2024, between the Company and Mark R. Radabaugh . SIGNA TURES 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. NICHOLAS FINANCIAL, INC. (Registrant) Date: June 21, 2024 /s/ Mike Rost Mike Rost Chief Executive Officer