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Cash Converters is buying 11 franchisee stores. Picture: Sharon Smith/The West Australian.
Cash Converters is buying 11 franchisee stores. Picture: Sharon Smith/The West Australian.

Cash Converters says it has entered into agreements to buy 11 franchisee stores for $32.6 million, including a store in south-eastern Perth suburb of Gosnells.

Shares in the short-term micro lender and pawnbroker surged 6.5 cents, or 5.31 per cent, to $1.29 at 10am.

The acquisitions include eight franchised stores in Adelaide, two stores in the UK and the Gosnells store.

The acquisition price represents an EBIT multiple of 4.7 times on current earnings and an EBIT multiple of 3.7 times excluding acquired assets of $6.9 million.

Cash Converters will pay for the acquisitions from cash reserves and existing financing facilities.

"Based on historical financial results, we expect the stores will add $6.9 million in EBIT in the 2014 financial year," the company said.

The acquisitions will take the number of corporate-owned stores in Australia to 55 and 63 in the UK.

The company said it was continuing to review opportunities to acquire further stores and increase the distribution network for its financial services products.