- Led by proven operator and industry leader Craig Hecker, Bitty
is a profitable and growing platform that provides credit access to
underserved small businesses
- The transaction implies a 6.0x purchase multiple on adjusted
net income for the trailing twelve months ending March 31, 2024 and
is expected to be immediately accretive to OppFi earnings
- OppFi expects to continue evaluating strategic acquisition
opportunities in new and existing verticals to further facilitate
credit access
OppFi Inc. (NYSE: OPFI) (“OppFi” or the “Company”), a
tech-enabled, mission-driven specialty finance platform that
broadens the reach of community banks to extend credit access to
everyday Americans, today announced its strategic acquisition of a
35% equity interest in Bitty Advance, including its servicing
business (collectively “Bitty”). The transaction includes options
for OppFi to obtain majority and total ownership over time.
Bitty is majority controlled by Craig Hecker, an industry leader
and serial entrepreneur in the small business financing market, who
will continue to operate the business as Chief Executive Officer.
Bitty is a credit access company that offers revenue-based
financing and other working capital solutions. Since 2020, Bitty
has facilitated funding to more than 29,000 small businesses across
the United States, with products ranging from $2,000 to
$250,000.
“We’re excited by this acquisition, as we believe Bitty provides
the foundation for OppFi’s new vertical in small business
financing,” said Todd Schwartz, Chief Executive Officer and
Executive Chairman of OppFi. “Bitty facilitates credit access to
small businesses that are not served by traditional banks, aligning
with our mission to facilitate credit access to everyday Americans.
Small business financing is increasingly being originated online,
and we believe Bitty’s digital platform is well-positioned to
capture this growth. We look forward to working with Craig and his
team to further scale Bitty with OppFi’s data analytics,
automation, and marketing expertise.”
The U.S. Small Business Administration estimates there are 33
million small businesses, and a study by the Federal Reserve
indicates approximately 71% of medium to high credit risk small
business applicants for a loan, line of credit, or merchant cash
advance applied to a non-bank financing company, online lender, or
community development financial institution. The total addressable
market for non-bank and online lenders for small businesses is
approximately $550 billion per year, based on research from the
Consumer Financial Protection Bureau.
“I’m thrilled by this opportunity to partner with OppFi and
leverage its successful track record as we strive to take Bitty to
the next level of growth,” said Craig Hecker. “I admire OppFi’s
vision of building a multi-product, multi-customer platform that
facilitates credit access to those not served by traditional
banks.”
On an annualized basis, OppFi anticipates that Bitty would
contribute approximately $0.03 in adjusted earnings per share to
the consolidated results of OppFi.
OppFi has the option to acquire an additional 30% equity
interest for majority ownership of Bitty in 2027 and the option to
acquire the remaining equity for total ownership of Bitty in
2030.
Additional details regarding this transaction are included in
the Company’s Form 8-K to be filed today with the U.S. Securities
and Exchange Commission. OppFi management plans to discuss those
details and answer investor questions during the previously
announced second quarter 2024 earnings conference call on
Wednesday, August 7, 2024 at 9:00 a.m. ET.
Moelis & Company served as financial advisor and Sidley
Austin LLP served as legal counsel to OppFi.
About OppFi
OppFi (NYSE: OPFI) is a tech-enabled, mission-driven specialty
finance platform that broadens the reach of community banks to
extend credit access to everyday Americans. Through a transparent
and responsible lending platform, which includes financial
inclusion and an excellent customer experience, the Company
supports consumers, who are turned away by mainstream options, to
build better financial health. OppLoans by OppFi maintains a
4.5/5.0 star rating on Trustpilot with more than 4,400 reviews,
making the Company one of the top consumer-rated financial
platforms online. For more information, please visit oppfi.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. OppFi’s actual results
may differ from its expectations, estimates and projections and
consequently, you should not rely on these forward-looking
statements as predictions of future events. Words such as “expect,”
“estimate,” “project,” “budget,” “forecast,” “anticipate,”
“intend,” “plan,” “may,” “will,” “could,” “should,” “believes,”
“predicts,” “potential,” “possible,” “continue,” and similar
expressions may identify forward-looking statements, but the
absence of these words does not mean that a statement is not
forward-looking. These forward-looking statements include, without
limitation, the impact of the Bitty investment on OppFi’s business;
OppFi’s ability to scale and grow the Bitty business; statements
regarding future acquisitions, the future performance of OppFi’s
platform, and expectations for OppFi’s growth, new products, and
future financial performance. These forward-looking statements are
based on OppFi’s current expectations and assumptions about future
events and are based on currently available information as to the
outcome and timing of future events. These forward-looking
statements involve significant risks and uncertainties that could
cause the actual results to differ materially from the expected
results. Most of these factors are outside OppFi’s control and are
difficult to predict. Factors that may cause such differences
include, but are not limited to: the impact of general economic
conditions, including economic slowdowns, inflation, interest rate
changes, recessions, and tightening of credit markets on OppFi’s
business; the impact of challenging macroeconomic and marketplace
conditions, including lingering effects of COVID-19 on OppFi’s
business; the impact of stimulus or other government programs;
whether OppFi will be successful in obtaining declaratory relief
against the Commissioner of the Department of Financial Protection
and Innovation for the State of California; whether OppFi will be
subject to AB 539; whether OppFi’s bank partners will continue to
lend in California and whether OppFi’s financing sources will
continue to finance the purchase of participation rights in loans
originated by OppFi’s bank partners in California; OppFi’s ability
to scale and grow the Bitty business; the impact that events
involving financial institutions or the financial services industry
generally, such as actual concerns or events involving liquidity,
defaults, or non-performance, may have on OppFi’s business; risks
related to the material weakness in OppFi’s internal controls over
financial reporting; the ability of OppFi to grow and manage growth
profitably and retain its key employees; risks related to new
products; risks related to evaluating and potentially consummating
acquisitions; concentration risk; risks related to OppFi’s ability
to comply with various covenants in its corporate and warehouse
credit facilities; costs related to the business combination;
changes in applicable laws or regulations; the possibility that
OppFi may be adversely affected by other economic, business, and/or
competitive factors; risks related to management transitions; risks
related to the restatement of OppFi’s financial statements and any
accounting deficiencies or weaknesses related thereto; and other
risks and uncertainties indicated from time to time in OppFi’s
filings with the United States Securities and Exchange Commission,
in particular, contained in the section or sections captioned “Risk
Factors.” OppFi cautions that the foregoing list of factors is not
exclusive, and readers should not place undue reliance upon any
forward-looking statements, which speak only as of the date made.
OppFi does not undertake or accept any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements to reflect any change in its expectations or any change
in events, conditions or circumstances on which any such statement
is based.
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Investor Relations: investors@oppfi.com
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