RILY - Franchise Group agrees to $30 a share management buyout

2023-05-10 08:21:53 ET

Franchise Group ( NASDAQ: FRG ) agreed to a take private in a management buyout led by CEO Brian Kahn for $30 a share in cash. Franchise Group rose 2.2% in premarket trading.

The consortium purchasing Franchise Group ( FRG ) includes B. Riley Financial ( RILY ) and Irradiant Partners, according to a statement. The consortium is buying the 64% of the company's issued and outstanding common stock that the Management Group does not presently own or control.

The deal has an enterprise value of about $2.6 billion, including the company's net debt and outstanding preferred stock. The transaction represents a 31% premium to Franchise Group ( FRG ) stock on March 17, the last trading day before the company announced it re ceived a $30 a share takeover proposal.

The deal is expected to close in the second half of the year . The merger agreement includes a 30 day "go-shop" period where the company can solicit alternatives proposals. The agreement doesn't allow FRG to pay additional dividends during the proposed deal.

Franchise Group's businesses include Vitamin Shoppe, Buddy's Home Furnishings, Sylvan Learning, Pet Supplies Plus and other franchise operations.

Franchise Group ( FRG ) is set to report Q1 results on Wednesday.

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