PROG Holdings to Acquire Purchasing Power in $420 Million Deal
The cash acquisition aims to diversify PROG's payment solutions and expand its reach into the employee benefits market, marking a significant strategic expansion.
PROG Holdings, a prominent player in the lease-to-own industry, announced Monday it will acquire the e-commerce firm Purchasing Power for $420 million in an all-cash transaction, a significant move to broaden its financial technology offerings.
The deal represents a substantial strategic investment for PROG Holdings, with the acquisition price accounting for approximately 37% of its $1.14 billion market capitalization. The move signals a clear intent to diversify beyond its core lease-to-own model and capture a larger share of the consumer payments market through Purchasing Power's established employee benefits platform.
Purchasing Power operates a voluntary benefits program that allows employees at client companies to buy consumer goods and services through automated payroll deductions, offering a streamlined payment alternative for customers. This model provides PROG with a new, recurring revenue channel and access to a broad, employed customer base.
"Acquiring Purchasing Power adds a highly complementary and important new platform to our growing ecosystem of payment solutions," PROG Holdings CEO Steve Michaels said in a statement. The acquisition, he added, serves to "further diversify our product portfolio and advance our three-pillared strategy to Grow, Enhance and Expand." Michaels emphasized the synergy between the two companies, stating, "Together we expect to expand our offerings more quickly and effectively," according to the official announcement.
Shares of PROG Holdings (NYSE: PRG) were stable in Monday trading, closing at $29.03, up less than 1%. The muted market reaction suggests investors are weighing the long-term strategic benefits against the significant cash outlay for the acquisition. The company's stock has traded in a 52-week range of $23.19 to $47.95.
The transaction comes at a time of financial strength for PROG Holdings. The company reported a strong third-quarter performance for 2025, with an earnings per share of $0.90, which beat analyst expectations by over 21%. Its solid balance sheet, including a current ratio of 6.1, likely provided the confidence and capability to finance the significant all-cash deal.
Analysts covering PRG have a consensus price target of $39.67, implying considerable upside from its current trading level. The acquisition of a well-established platform like Purchasing Power could be a key catalyst in realizing that value, should the integration prove successful.
By integrating Purchasing Power, PROG Holdings not only gains a new product but also a valuable customer acquisition engine. Purchasing Power's business-to-business-to-consumer (B2B2C) model, which sells through corporate benefits programs, is a departure from PROG's traditional direct-to-consumer and retail partner channels.
This strategic pivot could help insulate the company from fluctuations in the retail sector and build a more diverse and resilient business. The deal is expected to close in early 2026, pending regulatory approvals and customary closing conditions.