Popular, Inc. Agrees to Sell Check Cashing Operation to ACE Cash Express, Inc.

Popular, Inc. announced that ACE Cash Express, Inc. will acquire substantially all of the assets of Popular Cash Express, Inc. (“PCE”), Popular’s wholly owned check cashing business, for $36 million. PCE owns and operates stores in California, Arizona, Florida and Texas. PCE, unlike most other check cashing operators in the country, never entered the payday loan business.

Popular, Inc. will subscribe, as part of the transaction, a subordinated convertible note to be issued by ACE in the amount of up to $22.5 million. Under the terms of the Convertible Note Agreement, Popular has the right to convert the debt into common shares of ACE at a 35% premium over ACE’s average closing share price for the 30 days preceding the initial closing date. If exercised the convertible instrument would give Popular an ownership interest of 4.99% in ACE based on current outstanding shares. Popular and ACE also agreed to explore mutually beneficial opportunities in the areas of transaction processing, cash management, and working capital and term financing.

“We believe strongly in the potential of this business to serve well the large and growing low and moderate income segments of the population,” said Roberto R. Herencia, President of Banco Popular North America. “This will allow us to hold an investment of the largest publicly traded player in the retail check cashing business. We remain committed to the industry as lender and servicer, and will do so now without being a direct competitor.”