Aaron to sell rent-to-rent assets to Cort
Business had 2007 revenues of $99 million
Gary Evans -- Furniture Today, September 15, 2008
ATLANTA — Aaron Rents said it has agreed to sell the assets of its Aaron's Corporate Furnishings division to Cort Business Services for $72 million in cash, in addition to payment for certain accounts receivable.Aaron Rents also is retaining certain liabilities of the business, including its accounts payable and accrued expenses, the company said.
Aaron's Corporate Furnishings, the company's residential rent-to-rent business, recorded revenues of $99 million for the fiscal year ended Dec. 31, and currently operates in 47 stores.
"The residential rent-to-rent business currently represents approximately 6% of our consolidated revenues, and for many years has not had the same growth rate of prospects of our fast growing and highly successful Aaron's Sales& Lease Ownership division," said Robert C. Loudermilk Jr., president and CEO of Aaron Rents.
"This sale will enable us to focus our resources and energy on growing the Aaron's Sales and Lease Ownership division. With this divesture, we anticipate the company will record increased revenue and earnings growth rates in future periods," he said.
Aaron Rents will treat the sale for accounting purposes as a discontinued operation beginning with its third quarter results. The company does not expect to record any significant gain or loss on the sale and its earning guidance for the third quarter of fiscal 2008 is unchanged.
The sale, which is subject to customary closing conditions, including antitrust clearance, is expected to close by the end of the year.
