Katapult completes merger with CCFI and Aaron's, secures $275M in new loans

What happened

Katapult Holdings, Inc. (NASDAQ: KPLT) announced on August 11, 2026, that it completed its previously announced business combination with CCF Holdings LLC ("CCFI") and Aaron's Intermediate Holdco, Inc. ("Aaron's"), according to a Form 8-K filed with the SEC. The transaction was effected through a series of mergers, resulting in CCFI and Aaron's becoming part of Katapult.

In connection with the closing, Katapult entered into two new senior secured term loan facilities: a $200 million TopCo Term Loan (with an initial $122 million funded at closing and an additional $78 million delayed draw facility) and a $75 million MidCo Term Loan. The proceeds of the MidCo Term Loan were used to repurchase 65,000 shares of Katapult preferred stock previously issued to Hawthorn. Katapult also amended its existing asset-based revolving credit facility and the TMX ABL Credit Facility.

The company's common stock closed at $7.88 on the event date, down 1.5% from the prior close of $8.00.

Details of the merger

The merger was structured under an Agreement and Plan of Merger dated December 11, 2025, as amended on June 17, 2026. Immediately before the mergers, Katapult exchanged equity interests held by management incentive plan holders in Aaron's and CCFI for shares of Katapult common stock: 943,580 shares for Aaron's MIP units and 11,011,927 shares for CCFI MIP equity.

At the effective times of the mergers, all outstanding equity interests in Aaron's (excluding those held by stockholders exercising dissenters' rights) were converted into 11,369,237 shares of Katapult common stock. Similarly, CCFI equity interests (excluding certain options and warrants) were converted into 58,516,558 shares. An additional 244,146 shares became subject to existing CCFI warrants.

The filing notes that the transaction resulted in a change in control (Item 5.01) and director or officer changes (Item 5.02), though the specific details of those changes were not included in the excerpted text.

Details of the new debt facilities

The TopCo Term Loan Agreement provides for a senior secured loan of up to $200 million. The initial $122 million tranche was fully funded at closing. A delayed draw tranche of up to $78 million can be drawn until August 11, 2028. Borrowings carry interest at 15% per annum payable in cash plus 5% per annum payable as paid-in-kind (PIK) interest, which is added to the principal. All obligations are due on August 11, 2029.

The MidCo Term Loan Agreement provides a $75 million senior secured facility, which was used to repurchase preferred stock. It bears interest at 15% per annum, with the option to pay interest as PIK if the agent approves. The loan matures on November 3, 2030.

Both agreements include customary covenants, such as minimum interest coverage and liquidity ratios, and are secured by substantially all personal property of the borrowers and guarantors. The TopCo facility also includes a maximum leverage ratio.

In addition, the existing asset-based revolving facility was amended to include Katapult MidCo as a guarantor and to release Katapult from its obligations under that facility (subject to certain surviving obligations). The TMX ABL Credit Facility was amended to extend the draw period to December 31, 2027, reduce the minimum liquidity covenant to $17.5 million, and reset legacy loan balances.

What this means

An 8-K is a "current report" companies must file with the SEC within four business days of a major event that shareholders should know about. This filing covers items 1.01 (material agreement), 2.01 (acquisition completion), 2.03 (direct financial obligation), 3.02 (unregistered sale of equity), 5.01 (change in control), 5.02 (director/officer change), and 8.01 (other events).

The completed merger significantly expands Katapult's business. Katapult provides lease-to-own solutions for e-commerce retailers, allowing consumers to finance purchases over time. CCFI and Aaron's are also players in the lease-to-own and rent-to-own space. The combined entity will operate under Katapult's public listing.

The new debt facilities carry very high interest rates (15% cash plus 5% PIK for the TopCo loan). PIK interest means the company can pay interest by adding it to the principal rather than paying cash, which preserves liquidity but increases the total debt burden. The 15% all-cash rate on the MidCo facility is also well above typical corporate borrowing costs, indicating that lenders view the combined company as higher risk. The delayed draw feature on the TopCo facility gives Katapult flexibility to borrow additional funds over the next two years if needed.

Going forward, Katapult will be subject to quarterly financial covenants (interest coverage, leverage, liquidity) and weekly liquidity tests under the MidCo facility. The company must also deliver semi-annual business plans. Failure to meet these covenants could trigger acceleration of the debt.