Liberty Tax Service franchisees may, but are not required to, offer consumer and business loans in addition to tax preparation services if the merger with NextPoint Acquisition Corp. $ 243 million worth $ 243 million is completed by mid-June, CEO Brent Turner expects.
NextPoint, a Canada-based Special Purchase Acquisition Company, or SPAC, is also looking to purchase LoanMe, a California-based lender that provides consumer and business loans, at triple-digit rates. According to WalletHub, LoanMe personal loans calculate an APR range of 9.9 to 98 percent. Business loans have interest rates between 14.9 percent and 149 percent.
The deal is expected to close in mid-June. Turner will become CEO of the newly named NextPoint Financial, Turner confirmed via email last month. Franchisees could then offer tax preparation and lending services. Turner called the loan products “very profitable” on an investor conference call and said they would be available in 850 Liberty Tax locations by 2023. Liberty Tax has 1.6 million customers and 2,700 locations, Liberty said. At the beginning of 2017, the company had 3,668 units.
The seller and current owner, named after a name change by Liberty Tax Franchise Group Inc., will use cash proceeds of $ 182 million to pay off debt. Supported by venture capital firm Vintage Capital Management at the time of founder and former CEO John Hewitt’s departure in July 2018, the franchise group began acquiring other brands in 2019. Her holdings now include Buddy’s Home Furnishings, American Freight, The Vitamin Shoppe, and Pet Deliveries Plus.
NextPoint describes its mission, according to a presentation to investors, as “a one-stop financial services goal that enables hardworking and credit-challenged consumers and small businesses to move to NextPoint in their financial future.” “Massive cross-selling synergy opportunities” between Liberty Tax and LoanMe have been described.
Liberty Tax sued founder John Hewitt in March for unfair business practices.