Franchise Group, Inc. Announces Definitive Agreement to Be Acquired by a Consortium Led by Management Group - Seite 2

Brian Kahn, CEO of Franchise Group 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.”

Certain Transaction Details

The independent directors of Franchise Group’s Board of Directors have unanimously approved the proposed merger based upon the unanimous recommendation of a Special Committee of the Board of Directors, which was composed of independent directors not affiliated with the Management Group and was advised by its own financial and legal advisors.

The Management Group has agreed to rollover their shares of common stock of the Company in connection with, and vote their shares of common stock in favor of, the proposed merger, with such voting obligation terminating should the Merger Agreement be validly terminated, including in connection with a “superior proposal.” The consortium has also received definitive financing commitments from third party lenders and institutional investors, including B. Riley Financial Inc. and Irradiant Partners, to finance a portion of the purchase price.

The proposed merger is anticipated to close in the second half of 2023, subject to satisfaction or waiver of customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Act and the approval of the Company’s stockholders, including approval by a majority of the shares of common stock of the Company not owned or controlled by the Management Group or other members of the buyer consortium. The Merger Agreement also includes a 30 day “go shop” period that will allow the Company to affirmatively solicit alternative proposals from interested parties. At the current time, the Company is not permitted to pay dividends on its outstanding shares of common stock under its existing indebtedness agreements. In addition, the Merger Agreement does not permit the Company to pay additional dividends on the outstanding shares of common stock during the pendency of the proposed merger.