v3.26.3
ACQUISITION
 9 Months Ended
Sep. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITION ACQUISITION
Acquisition Overview
On January 2, 2026 (the "Acquisition Date"), PROG Beach, LLC ("PROG Beach"), a wholly owned subsidiary of the Company, acquired 100% of the issued and outstanding equity interests of Purchasing Power from Purchasing Power Parent, LLC (the "Seller") pursuant to a Unit Purchase Agreement dated December 1, 2025. Purchasing Power is a voluntary employee benefit program provider that allows employees of participating organizations to purchase brand‑name products and services through payroll deduction or allotment arrangements.
The transaction has been accounted for as a business combination under ASC 805, "Business Combinations." Purchasing Power's results of operations have been included in the Company's condensed consolidated financial statements from the Acquisition Date.
Management expects the acquisition to meaningfully expand the Company's platform by broadening consumers' access to flexible, inclusive and convenient payment options across high-demand categories and to strengthen the Company's partner ecosystem through Purchasing Power's more than 360 employer-client relationships and benefit-broker distribution channel.
Consideration Transferred
The total consideration transferred for purposes of ASC 805 was $424.2 million. The consideration was paid entirely in cash and consisted of the following components:
(in thousands)
Amount
Cash paid to Seller
$216,220 
Indebtedness of the Seller settled in cash by the Company at closing1
199,283 
Transaction-related costs of the Seller paid by the Company at closing
6,724 
Amounts placed in escrow for general representations and warranties
2,000 
Total consideration transferred1
$424,227 
1 Total consideration transferred comprises a $420 million negotiated purchase price plus $4.2 million of asset-backed indebtedness of the Seller that was repaid by the Company at closing.
The consideration transferred did not include any contingent consideration. The escrow arrangement relates only to general representations and warranties that were valid as of the Acquisition Date and, accordingly, was included in consideration transferred rather than accounted for as contingent consideration, as the amounts are not contingent on future events. The escrowed funds were subsequently released to the Seller in accordance with the terms of the acquisition agreement.
The Company incurred $11.1 million of acquisition-related costs during the nine months ended September 30, 2026, which were recorded within operating expenses in the condensed consolidated statements of earnings, and are not included in consideration transferred. The Company incurred approximately $2.2 million of acquisition-related costs in the year ended December 31, 2025 related to this transaction.
Fair Value Measurement
The fair values of acquired assets and assumed liabilities were determined using valuation techniques that require significant management judgment, including the use of unobservable inputs. The valuation methodologies applied were consistent with those that a market participant would use in measuring fair value.
Receivables were measured at fair value using discounted cash flow methodologies that considered expected cash collections, default assumptions, prepayment behavior, and market‑based discount rates. The gross contractual amounts receivable and the expected credit losses are reflected in the fair value measurement; accordingly, no allowance for credit losses was recorded at acquisition.
Identifiable intangible assets, including customer relationships, broker network relationships, trade names, and developed technology, were valued using income‑based and cost‑based approaches. Customer relationships and broker network intangibles were valued using the multi‑period excess earnings method, using attrition rates based on historical experience. Trade names were valued using the relief‑from‑royalty method, using royalty rates based on market participant assumptions. Developed technology was valued using the replacement cost method.
These fair value measurements are classified as Level 3 measurements within the fair value hierarchy.
The Company has completed a preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date. The valuation of certain accrued liabilities is preliminary. Accordingly, the purchase price allocation is subject to adjustment during the measurement period (not to exceed one year from the Acquisition Date) as additional information becomes available and such changes may result in adjustments to goodwill.
Allocation of the Purchase Consideration
The following table summarizes the preliminary allocation of the purchase consideration to the estimated fair values of the assets acquired and liabilities assumed as of January 2, 2026:
(in thousands)
Amounts recognized as of acquisition date (January 2, 2026)
Aggregate purchase price
$424,227 
Estimated fair value of identifiable assets acquired and liabilities assumed
Cash and cash equivalents
15,125 
Restricted cash
17,257 
Accounts receivable1
355,993 
Other receivables1
35,143 
Property, plant and equipment
1,692 
Other intangible assets
319,000 
Other assets
15,153 
Total identifiable assets acquired
759,363 
Accounts payable and accrued expenses
(85,213)
Non-recourse funding debt
(338,608)
Deferred income tax liability
(18,988)
Other liabilities
(2,980)
Total liabilities assumed
(445,789)
Goodwill2
110,653 
Net assets acquired
$424,227 
1 The gross contractual unpaid principal balance of acquired installment accounts receivable and other receivables, with fair values of $324.0 million and $35.1 million, respectively, was $426.3 million, and the Company expects to collect $370.7 million. Accounts receivable also includes $32.0 million of client receivables, which the Company expects will be fully paid.
2 The excess of the purchase consideration over the estimated fair value of the net identifiable assets acquired has been recorded as goodwill.
The purchase price allocation remains preliminary as of September 30, 2026. During the three months ended September 30, 2026, no measurement period adjustments were recorded.
Goodwill and Other Intangible Assets
Goodwill primarily reflects the expected synergies from combining Purchasing Power's payroll-deduction purchasing platform, employer and broker relationships, and proprietary technology with the Company's existing consumer payment solutions. These synergies include anticipated revenue enhancements from cross-selling the Company's lease-to-own and payment solutions to Purchasing Power's existing employer-sponsored customer base, as well as the ability to offer Purchasing Power's payroll-deduction purchasing capabilities to the Company's existing retail and e-commerce partner network.
In addition, the Company expects to realize operational efficiencies and cost savings through the integration of technology platforms, consolidation of certain corporate and administrative functions, and optimization of funding and servicing operations. Goodwill also reflects the value of the assembled workforce and other intangible benefits that do not qualify for separate recognition under ASC 805. All goodwill recognized has been assigned to the Purchasing Power reporting unit. The goodwill is partially deductible for income tax purposes based on the structure of the acquisition. Approximately $77.2 million of the goodwill is expected to be deductible and amortizable for tax purposes, with the remainder not expected to be deductible.
The intangible assets attributable to the acquisition are comprised of the following:
Fair value
(in thousands)
Weighted average life
(in years)
Client relationships
$258,000 10.0
Broker relationships
24,000 10.0
Trade name
29,000 20.0
Developed technology
8,000 5.0
Total acquired intangible assets1
$319,000 
1 Acquired definite-lived intangible assets have a total weighted average life of 10.8 years.
Acquisition Financing
In conjunction with the acquisition, on January 2, 2026, the Company entered into a fourth amendment to its existing credit facility, under which the Company obtained a $125.0 million incremental term loan and borrowed an additional $135.0 million under its revolving facility. The proceeds, together with cash on hand, were used to fund the cash consideration paid at closing and related transaction costs.
In addition, Purchasing Power had $338.6 million of non-recourse funding debt under its securitization and warehouse facilities. This non-recourse funding debt remained in place, and has been recorded at fair value as of the acquisition date and is reflected as liabilities in the preliminary purchase price allocation. The funding debt is secured solely by the related receivables and is non-recourse to the Company's other assets.
See Note 7 for additional information regarding the Company's debt arrangements.
Supplemental Pro Forma Information
The following unaudited pro forma information presents the combined results of operations of the Company as if the acquisition of Purchasing Power had occurred on January 1, 2025:
Three months ended September 30,Nine months ended September 30,
(in thousands)
2026202520262025
Total revenues from continuing operations
$725,779 $699,244 $2,188,168 $2,179,344 
Net earnings from continuing operations
$36,915 $28,715 $111,922 $90,355 
The unaudited pro forma information reflects adjustments directly attributable to the acquisition, including amortization of acquired intangible assets, financing effects, and related tax impacts. The pro forma information does not include the effects of expected synergies, integration activities, or other nonrecurring items, and is not necessarily indicative of future results.
Net cash used in the acquisition, net of cash and restricted cash acquired of $32.4 million, was $391.8 million and is included within investing activities in the condensed consolidated statements of cash flows for the nine months ended September 30, 2026.
For the three months ended September 30, 2026, Purchasing Power contributed revenues of $131.8 million and pre-tax net earnings of $3.0 million to the Company's condensed consolidated results of operations. For the nine months ended September 30, 2026, Purchasing Power contributed revenues of $369.3 million and a pre-tax net loss of $4.8 million.