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Financial, Retail

Franchise Group Announces Definitive Agreement to Be Acquired by a Consortium Led by Management Group

The owner of American Freight, Badcock Home Furniture, and Buddy’s Home Furnishings is taken private in $2.6 billion deal lead by CEO.

5/11/2023
DELAWARE, Ohio -- Franchise Group, Inc. (NASDAQ: FRG) -- the owner and operator of franchise businesses including American Freight, Badcock Home Furniture, and Buddy’s Home Furnishings -- announced that it has entered into a definitive acquisition agreement and merger plan with a consortium that will give majority control of the company to an acquisition group.

The acquisition groupThe transaction, valued at $2.6 billion, is led by Brian Kahn, Franchise Group’s CEO, in financial partnership with B. Riley Financial Inc. and Irradiant Partners. Together, they will acquire 64 percent of the company’s issued and outstanding common stock not currently owned by members of the management team.

Under the terms of the proposed merger, Franchise Group common stockholders, other than the management group, will receive $30.00 in cash for each share of Franchise Group common stock they hold. This represents a premium of 31.9 percent to the company’s unaffected closing common stock price on March 17, 2023, the last trading day before the Company announced the receipt of an unsolicited proposal to acquire the Company from a third party.

“This transaction is an exciting milestone for our company,” said Matt Avril, chairman of the board of directors and the Special Committee of Franchise Group. Avril continued,  “The Special Committee and its advisors conducted an independent process and review of the strategic alternatives available to the Company, with a focus on obtaining the best outcome for public stockholders. We believe the proposed transaction delivers immediate and certain value for public stockholders at a significant premium to the unaffected share price, and we have the flexibility to explore other potential transaction opportunities during the go shop period under the Merger Agreement.”

Kahn stated, “We are excited to have this opportunity to continue our business strategy of partnering with high quality franchisees, operators and financial institutions, while also delivering certain value to our public stockholders despite a challenging business environment.”

Franchise Group's portfolio also includes: Vitamin Shoppe, Pet Supplies Plus, Wag N’ Wash and Sylvan Learning.

To see details of the transaction, click here.
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