Edgar Filing: AARON'S INC

DEFA14A

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

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¨		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

¨		Definitive Proxy Statement

¨		Definitive Additional Materials

x		Soliciting Material Pursuant to Section 240.14a-12

AARON’S, INC.

(Name of Registrant as Specified in its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LOGO

The Industry Leader in Virtual Rent-to-Own

Industry Leader in Large and Growing Market

The leading player in the virtual RTO channel

Natural extension of Aaron’s business

Top-tier merchant partners and management team

Growing merchant relationships / strong pipeline

Attractive returns on capital

Highly Scalable Business Model

High degree of technology and automation

Centralized call center

Omnichannel Retailing Platform

Ability to serve customers at the point-of-sale across a wide array of retail channels

Future Combination Opportunities

Integrate Progressive’s decision engine into Aaron’s

Leverage Aaron’s store footprint

Attractive Growth-Adjusted Valuation

6.4x 2015E EBITDA, net of ~$90m tax asset

10.4x 2015E unlevered net income

$24bn Addressable Market ($ in billions) Appliances $1b 6% Other

$3b 14% Consumer Electronics Furniture & $10b

Bedding 42% $4b 16% Mobile $5b 21% Progressive’s Revenue Opportunity Progres-sive $650mm FY14 Aaron’s is Now the Clear Market Leader with the Scale and Presence to Reach ~60mm Target U.S. Households 17,123 Doors 15,000 4,665 of 1,325 179 2,132 787 3,161 787 239 168 78 64 59 Number 1,345 1,345 PF Aaron’s Rent-A-Center Aarons Easyhome Buddy’s Bestway Rent One Premier Home Furnishings Rentals Company-operated / Core Franchise Stores Progressive Acceptance NOW Kiosks Primarily single Key Retail store and small Relationships chain furniture locations Unmanned

Estimated # Less than 1,000 ~ 15,000 1,325 ~5,700 2,500 of Locations on average

>100 Doors 1-20 36% Doors 50% 51-100 21-50 Doors Doors 9% 5% 2% 2% Jewelry 3% Auto 13% Furniture

36%

Mobile 17% Mattress

26% Progressive serves 5,500 Retailers in ~15,000 Locations

Historical and Projected Revenue

($ in million) $910-$940 $630-$650

$403 $228

2012A 2013A 2014E 2015E

Historical and Projected EBITDA ($ in million)

$90-$100

$39 $55-$60

$20

2012A 2013A 2014E 2015E

Revenue

($ in millions) $2,850-$2,950 $3,250–$3,350

$2,235

$2,650-$2,750 2013A 2014E 2015E Aaron’s Aaron’s + Progressive

Cash EPS ($ in millions) $2.05–$2.20 $2.55–$2.80 $1.86

$1.95-$2.10 2013A 2014E 2015E Aaron’s + Progressive Full Year Pro Forma Financial Profile for Aaron’s + Progressive Note: Pro forma numbers exclude impact of potential synergies. Additional Information and Where To Find It This communication may be deemed to be solicitation material in connection with the Company’s 2014 Annual Meeting of Shareholders. The Company will be filing documents with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the 2014 Annual Meeting of Shareholders, including the filing by the Company of a proxy statement. SHAREHOLDERS ARE URGED TO READ THE COMPANY’S PROXY STATEMENT AND ACCOMPANYING PROXY CARD FOR THE 2014 ANNUAL MEETING OF SHAREHOLDERS WHEN IT BECOMES AVAILABLE, AS WELL AS OTHER DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain these documents (when they are available) free of charge at the SEC’s website, http://www.sec.gov, and at the Investor Relations section of the Company’s website, http://www.aarons.com. The final Proxy Statement for the 2014 Annual Meeting of Shareholders will be mailed to shareholders of the Company. About Aaron’s, Inc. Aaron’s, Inc. (NYSE: AAN), a leader in the sales and lease ownership and specialty retailing of residential furniture, consumer electronics, home appliances and accessories, has more than 2,130 Company-operated and franchised stores in 48 states and Canada. Founded in 1955 by entrepreneur and Chairman Emeritus R. Charles Loudermilk, Sr. and headquartered in Atlanta, Aaron’s has been publicly traded since 1982. For more information, visit www.aarons.com. Aaron’s, Inc. includes the Aarons.com and ShopHomeSmart.com brands. About Progressive

Progressive is a provider of web-based lease-to-own programs for retailers. The Company currently serves 5,500 retail partners with approximately 15,000 locations, including 40 of the top 100 and eight of the top 20 U.S. furniture and bedding retailers.

LOGO

Safe Harbor Statement

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this presentation regarding Aaron’s, Inc.’s business that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by the use of words such as “expect,” “anticipate,” “believe,” “estimate,” “potential,” “should” or similar words. Examples of such statements include Aaron’s plans for value creation and delivery of long-term shareholder value; long-term financial targets; potential share repurchases; industry outlook; and expectations regarding accretion to earnings, increased revenues, returns to shareholders, expansion of customer base and the other expected strategic and financial benefits of the acquisition. These statements are based on current expectations, forecasts and assumptions of Aaron’s that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include: changes in general economic conditions; the impact of competition; the impact of litigation; changes to customer demand; Aaron’s ability to maintain customer privacy and information security; the cost and time required of Aaron’s management and employees and general disruption to Aaron’s operations associated with responding to any potential proxy contest; the ability to achieve expected synergies and operating efficiencies from the acquisition; the ability to successfully integrate Progressive’s operations; such integration may be more difficult, time-consuming or costly than expected; revenues following the acquisition may be lower than expected; operating costs, customer loss and business disruption may be greater than expected following the acquisition; the retention of certain key employees at Progressive; the amount of the costs, fees, expenses and charges related to the acquisition; and the risks and uncertainties discussed under “Risk Factors” in Aaron’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. Aaron’s assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.

Additional Information and Where To Find It

This communication may be deemed to be solicitation material in connection with the Aaron’s 2014 Annual Meeting of Shareholders. Aaron’s will be filing documents with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the 2014 Annual Meeting of Shareholders, including the filing by Aaron’s of a proxy statement. SHAREHOLDERS ARE URGED TO READ THE AARON’S PROXY STATEMENT AND ACCOMPANYING PROXY CARD FOR THE 2014 ANNUAL MEETING OF SHAREHOLDERS WHEN IT BECOMES AVAILABLE, AS WELL AS OTHER DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain these documents (when they are available) free of charge at the SEC’s website, http://www.sec.gov, and at the Investor Relations section of the Aaron’s website, http://www.aarons.com. The final Proxy Statement for the 2014 Annual Meeting of Shareholders will be mailed to shareholders of Aaron’s.

Participants in Solicitation

Aaron’s and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from shareholders in connection with the Aaron’s 2014 Annual Meeting of Shareholders. Information concerning such participants and their direct or indirect interests, including their beneficial ownership in Aaron’s, is available in the Aaron’s Proxy Statement for the 2013 Annual Meeting of Shareholders filed with the SEC on April 8, 2013, and will be set forth in the Proxy Statement and other materials to be filed with the SEC in connection with the 2014 Annual Meeting of Shareholders when it becomes available. Information regarding the direct and indirect beneficial ownership of the Aaron’s directors and executive officers in Aaron’s securities is also included in their respective SEC filings on Forms 3, 4 and 5. Shareholders are advised to read Aaron’s Proxy Statement for the 2014 Annual Meeting of Shareholders and other relevant documents when they become available, because they will contain important information. You can obtain free copies of these documents from Aaron’s as described above.