GREENWICH, Conn. — Southfield Capital Advisors, a private investment firm focused on the lower middle-market, agreed to sell Dealers’ Financial Services (DFS) LLC to Dollar Financial Corp. for approximately $118 million in cash.
The acquisition, which is contingent upon Dollar obtaining financing, is anticipated to be completed in early December.
DFS is headquartered in Lexington, Kentucky and was founded in 1996. The company’s flagship Military Installment Loan and Educational Services (MILES) program offers a range of services to enlisted junior military personnel, seeking to purchase new and low mileage automobiles, including automotive purchasing, budgeting, credit and ownership training, one-on-one consultation, access to a national bank for automobile loans and ancillary services such as service contracts and guaranteed asset protection (GAP) coverage.
The loans are funded and serviced under an exclusive agreement with a major third-party national bank, which funds and maintains the loan portfolio on its balance sheet, as well as bears any risk of repayment default. The unique underwriting standards of the third party bank lender, and the ability to purchase warranty and GAP insurance policies at a discount, help insulate the borrower from events that typically lead to loan default.
Southfield Capital acquired a majority stake in DFS in November 2006. In partnership with the senior management team at DFS, Southfield Capital helped more than double the company’s revenue and EBITDA since acquisition. The potential sale of DFS would represent a successful exit for Southfield Capital, its investors and DFS founders, and provides an opportunity for the DFS management team to continue to execute on its growth strategy.