Company: ATLCL
Filing Date: 2025-09-17
Form Type: 8-K
Source: 0001437749-25-029311
Chunk: 0

Company: Atlanticus Holdings Corp
Filing Date: 2025-09-17
Form: 8-K
Item: Item 1.01
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Item 1.01.      Entry into a Material Definitive Agreement.  

On September 11, 2025, Mercury Finance Acquisitions, LLC, a Georgia limited liability company (the “ Purchaser”), and wholly-owned subsidiary of Atlanticus Holdings Corporation (the “ Company”), entered into a Membership Interest Purchase Agreement (the “ Purchase Agreement”) with Mercury Financial Intermediate LLC, a Delaware limited liability company (“ Seller”), Mercury Financial LLC, a Delaware limited liability company (“ Mercury”), and solely for purposes of Section 7.7 of the Purchase Agreement, the Company. Pursuant to the Purchase Agreement, and subject to the conditions thereof, the Purchaser acquired all of the issued and outstanding equity interests of Mercury (the “ Acquisition”), which is a leading data- and tech-centric credit card platform used to provide credit cards to near-prime consumers in the U. S. As a result of the Acquisition, the Company added approximately 1.3 million credit card accounts and $3.2 billion in credit card receivables.

The purchase price under the Purchase Agreement was approximately $162 million (the “ Initial Purchase Price”), subject to an adjustment mechanism to true up the adjusted net asset value of Mercury as compared to a target adjusted net asset value and certain other customary adjustment items. The Company used cash on hand to fund the Initial Purchase Price under the Purchase Agreement.

In addition to the Initial Purchase Price, the Seller has the opportunity under the Purchase Agreement to receive earn out payments for up to three years following the closing of the Acquisition in an amount equal to 75% of the amount by which the charge-offs of Mercury’s managed receivables are less than agreed-upon charge-off levels.

In connection with the Acquisition, the Purchaser purchased a buy-side representations and warranties insurance policy, which comprises the material portion of the Purchaser’s remedy for breaches of representations and warranties, absent fraud or beaches of certain fundamental representations and warranties identified in the Purchase Agreement. The representations and warranties insurance policy is subject to certain policy limits, exclusions, deductibles and other terms and conditions. The Purchase Agreement also contains customary indemnification obligations of each party with respect to breaches of their respective covenants and certain other specified matters.

In connection with the Acquisition, Mercury entered into restrictive covenant agreements with the Seller and an indirect equityholder of Mercury that contain post-closing covenants that, among other things, restrict the Seller and such indirect equityholder from soliciting certain of Mercury’s employees.

The foregoing description of the Purchase Agreement is qualified in its entirety by