Franchise Group, Inc. To Acquire American Freight Group For $450M In Cash

Franchise Group, Inc. (NASDAQ:FRG) (“Franchise Group” or the “Company”), today announced it has entered into a definitive agreement under which it will acquire American Freight Group, Inc.

Benzinga · 12/30/2019 11:32

Franchise Group, Inc. (NASDAQ:FRG) (“Franchise Group” or the “Company”), today announced it has entered into a definitive agreement under which it will acquire American Freight Group, Inc. (“American Freight”), a retail chain offering brand-name furniture, mattresses and  home accessories at discount prices, in an all cash transaction valued at approximately $450 million from an affiliate of The Jordan Company, L.P. and other stockholders of American Freight (the “Transaction”).  Upon the closing of the Transaction, Franchise Group’s systemwide revenue, which is defined as total sales for both franchise and company units, will exceed $2.4 billion.

The Transaction is expected to be completed in the first quarter of 2020, subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as other customary closing conditions.

In connection with the signing of the Transaction, Franchise Group intends to sign a new $700 million credit facility with affiliates of Kayne Anderson Capital Advisors, L.P. (“Kayne”) and Great American Capital Partners, LLC (GACP), a subsidiary of B. Riley Financial, Inc. (NASDAQ:RILY), that will provide 100% of the financing needed for the Transaction, including the refinancing of the Company’s term loans for its Buddy’s Home Furnishings and Sears Outlet businesses (the “Financing”). The Financing will close simultaneously with the Transaction. B. Riley FBR, Inc. and Kayne acted as advisors for the Transaction.