Larry Thomas
PLANO, Texas — Rent-A-Center, the nation’s biggest operator of rent-to-own stores, said today it has agreed to acquire Rent-Way, the No. 3 RTO operator, in deal valued at $567 million.


According to the agreement, Rent-A-Center will pay $10.65 in cash for each share of Rent-Way stock. In addition, holders of Rent-Way options will receive the difference between the exercise price and $10.65.

The price represents a 29% premium over Monday’s $8.23 closing price of Rent-Way stock. The company’s shares shot up to $10.25 in New York Stock Exchange trading Tuesday morning.

“We are very excited about this transaction with Rent-Way,” said Mark Speese, chairman and CEO of Rent-A-Center. “Given our track record of successfully integrating acquisitions and implementing our proven business model, we believe this transaction will create additional value for our stockholders.”

Rent-A-Center has 2,750 stores in the U.S., Canada and Puerto Rico, while Rent-Way has 784 locations in 34 states. The rivals operate in many of the same markets, and it wasn’t immediately clear if any locations would be closed once the acquisition is finalized.

Regardless of any consolidation, the deal will solidify Rent-A-Center’s position as the largest RTO operator. No. 2 Aaron Rents has about 1,245 locations in 47 states.

Speese said he expects the deal will lead to savings on advertising, merchandise purchases and administrative expenses. He said he believes it will add one to two cents per share to Rent-A-Center’s 2014 earnings, and should boost earnings per share by 20 cents in 2015 and 35 cents in 2016.