PROG Holdings (PRG) closes $420M P-Squared deal and amends credit facility

Rhea-AI Filing Summary

PROG Holdings completed its previously announced acquisition of P-Squared, LLC on January 2, 2026 through its subsidiary PROG Beach, LLC. The purchaser paid approximately $420 million in cash, subject to customary adjustments, and the acquired business retains about $330 million of non-recourse funding debt under securitization and warehouse facilities.

To finance the deal and related costs, the company amended its existing credit agreement to add a $125 million incremental term loan, alongside $135 million of revolving borrowings and cash on hand. The new term loan shares guarantees and collateral with the revolver and matures on November 15, 2029. The amendment also updates interest-rate grids and commitment fees based on total net leverage, relaxes the maximum total net leverage ratio to 3.25x in fiscal 2026, and introduces a new $150 million restricted payment basket while permitting certain receivables and warehouse financings.

The acquisition gives PROG Holdings control of the seller’s voluntary employee benefit program, which lets workers purchase brand-name products and services through payroll deductions without credit checks. Required financial statements and pro forma financial information for the acquired business will be filed by amendment within 71 days.

Insights

M&A and capital structure analyst

PROG funds a sizable acquisition with new term debt and looser leverage limits.

PROG Holdings completed the purchase of P-Squared, LLC for approximately $420 million in cash, adding a business focused on voluntary employee benefit programs that use payroll deductions rather than credit checks. The acquired entity also carries about $330 million of non-recourse securitization and warehouse debt, which remains in place and continues to finance its receivables.

To support the transaction, PROG entered a fourth amendment to its credit agreement, adding a $125 million incremental term loan maturing on November 15, 2029, alongside $135 million of revolving borrowings and cash on hand. The amendment aligns pricing to total net leverage, with SOFR-based loans carrying margins between 1.50% and 2.75%, and updates unused commitment fees to a 0.25%–0.50% range.

The agreement also raises the maximum permitted total net leverage ratio to 3.25x in fiscal 2026, 3.00x in fiscal 2027, and 2.50x thereafter, and adds a new $150 million restricted payment basket subject to leverage tests. These terms indicate a more flexible leverage profile tied to this acquisition, while future filings with the required historical and pro forma financials will clarify the acquired business’s contribution and ongoing impact.

8-K Event Classification

5 items: 1.01, 2.01, 2.03, 7.01, 9.01

5 items

Item 1.01 Entry into a Material Definitive Agreement Business

The company signed a significant contract such as a merger agreement, credit facility, or major partnership.

Item 2.01 Completion of Acquisition or Disposition of Assets Financial

The company completed a significant acquisition or sale of business assets.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial

The company incurred a new significant debt or off-balance-sheet obligation.

Item 7.01 Regulation FD Disclosure Disclosure

Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Understanding 8-K Material Events →

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ________________________________

 FORM 8-K

________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 2, 2026

PROG HOLDINGS, INC.

(Exact name of Registrant as Specified in Charter)

Georgia

1-39628

85-2484385

(State or other Jurisdiction of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

256 W. Data Drive

Draper,

Utah

84020-2315

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (385) 351-1369

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

    Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

    ☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

    ☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

    ☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

    ☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.50 Par Value

PRG

New York Stock Exchange

    Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

    Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

INTRODUCTION

On January 2, 2026, PROG Beach, LLC (the "Purchaser"), a wholly-owned subsidiary of PROG Holdings, Inc. (the "Company"), completed its previously announced acquisition (the "Acquisition") of all of issued and outstanding equity interests of P-Squared, LLC (the "Acquired Entity") from Purchasing Power Parent, LLC (the "Seller"), pursuant to the Unit Purchase Agreement, dated as of December 1, 2025 (the "Purchase Agreement").

ITEM 1.01.     ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On January 2, 2026, the Company entered into a fourth amendment (the "Fourth Amendment") to that certain credit agreement, dated November 24, 2020, by and among Progressive Finance Holdings, LLC, as borrower, the Company and certain subsidiaries of the Company, as guarantors, the several banks and other financial institutions from time to time party thereto and JPMorgan Chase Bank, N.A, as administrative agent (as amended, the "Credit Agreement"). The Fourth Amendment provides for, among other things, the incurrence by the Company of a $125 million incremental term loan (the "Term Loan"), the proceeds of which, together with revolving borrowings of $135 million and cash on hand, were used to finance the Acquisition and related costs.

The Term Loan benefits from the same guarantees as, and ranks pari passu in right of payment and security with, the revolving loans under the Credit Agreement and will mature on November 15, 2029.

The Fourth Amendment updates the grid-based pricing applicable to all loans and the unused portion of the revolving commitments, with borrowings bearing interest at a rate per annum equal to, at the Company’s option, (i) SOFR plus a margin within the range of 1.50% to 2.75% for all loans, based on total net leverage, or (ii) the base rate plus the applicable margin, which will be 1.00% lower than the applicable margin for SOFR loans. The Fourth Amendment also updates the commitment fees payable on unused revolving commitments to a range of 0.25% to 0.50%, as determined based on total net leverage.

The Fourth Amendment (i) revises the quarterly financial maintenance covenant to increase the maximum permitted total net leverage ratio to 3.25x during fiscal year 2026, 3.00x during fiscal year 2027 and 2.50x thereafter and (ii) makes certain changes to the Credit Agreement’s negative covenants, including the addition of a new $150 million restricted payment basket and a condition that certain ratio-based baskets require pro forma total net leverage of not more than 2.50x.

The Fourth Amendment also adds provisions to permit the incurrence of receivables and warehouse financing facilities, including the existing non‑recourse facilities of certain special purpose subsidiaries of the Acquired Entity described under Item 2.01 below (with such special purpose subsidiaries being designated as unrestricted subsidiaries) and similar future facilities subject to customary conditions.

The foregoing description of the Fourth Amendment is only a summary and is qualified in its entirety by reference to the full text of the Fourth Amendment, a copy of which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

ITEM 2.01.     COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

The information set forth in the Introduction to this Current Report on Form 8-K is incorporated into this Item 2.01 by reference.

The aggregate consideration paid by the Purchaser to the Seller at the closing was approximately $420 million in cash, subject to customary adjustments. In addition, the Acquired Entity has approximately $330 million of non-recourse funding debt under its securitization and warehouse facilities that remained in place following the closing. The Acquisition resulted in the Company acquiring the Seller’s voluntary employee benefit program, which allows an employer’s workers to buy brand-name products and services through automatic payroll deductions without credit checks.

The Company funded the Acquisition with a combination of cash on hand and debt financing, as described in Item 1.01 above.

Other than in respect of the Acquisition, there is no material relationship between the Seller or the Acquired Entity, on the one hand, and the Company or any of its affiliates, on the other hand, or any director or officer of the Company, or any associate of any such director or officer.

The foregoing description of the Purchase Agreement is only a summary and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

ITEM 2.03.     CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT

The information set forth in the Item 1.01 above is hereby incorporated be reference into this Item 2.03.

ITEM 7.01.     REGULATION FD DISCLOSURE

On January 2, 2026, the Company issued a press release announcing the closing of the Acquisition. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 7.01 and Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01.     FINANCIAL STATEMENTS AND EXHIBITS

(a)    Financial Statements of Businesses Acquired.

The financial statements required by Item 9.01(a) of Form 8-K are not included in this Current Report on Form 8-K. The Company will file the financial statements required by Item 9.01(a) of Form 8-K by amendment no later than 71 calendar days after the date that this Current Report on Form 8-K is required to be filed.

(b)    Pro Forma Financial Information.

The pro forma financial information required by Item 9.01(b) of Form 8-K is not included in this Current Report on Form 8-K. The Company will file the pro forma financial information required by Item 9.01(b) of Form 8-K by amendment no later than 71 calendar days after the date that this Current Report on form 8-K is required to be filed.

(d)    Exhibits:

Exhibit No.			Description
99.1			Press Release, dated January 2, 2026 (furnished)
104			Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document)

SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

									PROG Holdings, Inc.
						By:			/s/ Todd King
Date:			January 2, 2026						Todd King Chief Legal and Compliance Officer

FAQ

What transaction did PROG Holdings (PRG) disclose in this 8-K?

PROG Holdings disclosed that its subsidiary PROG Beach, LLC completed the acquisition of all issued and outstanding equity interests of P-Squared, LLC from Purchasing Power Parent, LLC on January 2, 2026.

How much did PROG Holdings (PRG) pay to acquire P-Squared, LLC?

The purchaser paid aggregate cash consideration of approximately $420 million, subject to customary adjustments, to acquire all of the issued and outstanding equity interests of P-Squared, LLC.

How was the P-Squared acquisition financed by PROG Holdings (PRG)?

PROG funded the acquisition using a combination of $125 million in incremental term loan borrowings, $135 million in revolving borrowings under its credit agreement, and cash on hand.

What new debt and covenant changes did PROG Holdings (PRG) introduce?

The fourth amendment to the credit agreement added a $125 million term loan maturing on November 15, 2029, updated SOFR-based margins to a 1.50%–2.75% range, adjusted commitment fees to 0.25%–0.50%, raised the maximum total net leverage ratio up to 3.25x in fiscal 2026, and created a new $150 million restricted payment basket.

What business did PROG Holdings (PRG) gain through the P-Squared acquisition?

Through acquiring P-Squared, PROG obtained the seller’s voluntary employee benefit program, which enables workers to purchase brand-name products and services via automatic payroll deductions without credit checks.

Does the acquired P-Squared entity have existing debt that remains in place?

Yes. The acquired entity has approximately $330 million of non-recourse funding debt under securitization and warehouse facilities that remained outstanding after the closing.

When will PROG Holdings (PRG) provide financial statements for the acquired business?

PROG stated that the required historical financial statements and pro forma financial information for the acquired business will be filed by amendment no later than 71 calendar days after the date the current report is required to be filed.