LOS
ANGELES, Aug. 28, 2023 /PRNewswire/ -- B.
Riley Financial, Inc. (Nasdaq: RILY) ("B. Riley" or the "Company"),
a diversified financial services platform, announced it led the
equity financing to facilitate the $2.8
billion management-led acquisition of Franchise Group, Inc.
("FRG") which was completed on August
21, 2023.
B. Riley invested $216.5 million
of new capital in the transaction. Other institutional, financial
and strategic investors invested approximately $280 million of additional equity capital in the
new FRG alongside significant rollover equity contributions from
FRG management. As result of the completed transaction, the
management-led consortium has acquired all the outstanding and
issued common and preferred stock of FRG.
Bryant Riley, Chairman and
Co-Chief Executive Officer of B. Riley Financial, commented:
"We are pleased that our committed equity backstop played a role in
the ability to structure and successfully close this transaction.
We are also pleased to have the opportunity to invest alongside FRG
management and other co-investors in addition to a select group of
institutions and strategic partners."
"This is our second time taking a meaningful position in FRG. B.
Riley was an investor in Liberty Tax which ultimately became FRG in
2018. That initial investment generated a total IRR of over 30% for
our shareholders. Our ability to support our clients as a strategic
partner is a core strategy of our business and one we believe
serves as a key differentiator for our platform. We are also
thankful for our relationship with our lenders which has provided
us additional flexibility to serve our clients and shareholders
with approximately $300 million of
cash and near-term liquidity," added Riley.
New Credit Facility
B. Riley entered into a new credit agreement with certain of its
existing lenders, providing for a $600
million secured credit facility, of which a portion of
proceeds were used to finance the Company's equity investment in
FRG and retire its previous $380
million credit facility.
Brian Kahn, Chief Executive
Officer of Franchise Group, added: "B. Riley has been
instrumental in contributing to Franchise Group's growth dating
back to its predecessor, Liberty Tax. Over the last five years, B.
Riley has consistently supported us with creative capital solutions
through the series of value-creating acquisitions that generated
significant total returns for our public stockholders. We are
thrilled to continue our partnership with the B. Riley team, now as
our largest minority shareholder."
The FRG portfolio of businesses includes Pet Supplies Plus,
American Freight, The Vitamin Shoppe, Badcock Home Furniture &
more, Buddy's Home Furnishings, Sylvan Learning and Wag N Wash. On
a combined basis, FRG currently operates over 3,000 locations
predominantly located in the U.S. that are either operated by FRG
or operated pursuant to franchising and dealer agreements.
Advisors
Sullivan & Cromwell LLP served as legal counsel to B. Riley
in connection with its investment in FRG and the credit
facility.
About B. Riley Financial
B. Riley Financial is a diversified financial services platform
that delivers tailored solutions to meet the strategic,
operational, and capital needs of its clients and partners. B.
Riley leverages cross-platform expertise to provide clients with
full service, collaborative solutions at every stage of the
business life cycle. Through its affiliated subsidiaries, B. Riley
provides end-to-end financial services across investment banking,
institutional brokerage, private wealth and investment management,
financial consulting, corporate restructuring, operations
management, risk and compliance, due diligence, forensic
accounting, litigation support, appraisal and valuation, auction,
and liquidation services. B. Riley opportunistically invests to
benefit its shareholders, and certain affiliates originate and
underwrite senior secured loans for asset-rich companies. B. Riley
refers to B. Riley Financial, Inc. and/or one or more of its
subsidiaries or affiliates. For more information, please visit
www.brileyfin.com.
Contacts
|
Investors
|
Media
|
Mike Frank
|
Jo Anne
McCusker
|
ir@brileyfin.com
|
jmccusker@brileyfin.com
|
(212)
409-2424
|
(646)
885-5425
|
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SOURCE B. Riley Financial