Senior management team of Franchise Group, Inc. led by Brian Kahn, Chief Executive Officer made a non-binding proposal to acquire remaining 64% stake in Franchise Group, Inc. (NasdaqGM:FRG) for approximately $730 million on March 20, 2023. Senior management team of Franchise Group, Inc. led by Brian Kahn, Chief Executive Officer entered into a definitive agreement and plan of merger to acquire remaining 64% stake in Franchise Group, Inc. from Vintage Capital Management, LLC and others on May 10, 2023. The buyer will acquire all of the outstanding shares of Franchise for a price of $30 per share in cash. 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 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. The Merger Agreement also includes a 30 day ?go shop? period that will allow Franchise Group to affirmatively solicit alternative proposals from interested parties. Upon completion of the proposed merger, Franchise Group will become a private company and will no longer be publicly listed or traded on NASDAQ. Franchise Group?s management team, including Brian Kahn, is expected to continue to lead the Company. The Merger Agreement further provides that, upon termination of the Merger Agreement under certain specified circumstances, FRG will be required to pay a termination fee of $20.72 million and buyers will be required to pay FRG a termination fee of $55 million. B. Riley has committed to capitalize Parent at the closing of the Merger with an aggregate equity contribution up to $560 million on the terms and subject to the conditions set forth in an equity commitment letter. Certain financial institutions have agreed to provide with debt financing in an aggregate principal amount of up to $475 million on the terms and subject to the conditions set forth in a debt commitment letter.

The non-binding proposal is subject to certain conditions to acquire all of the outstanding shares of Franchise. Transaction is 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, approval by regulatory authorities and the approval of the shareholders of Franchise Group. 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. The Franchise Group approved all proposals related to the proposed acquisition. The proposed merger is anticipated to close in the second half of 2023. The proposed merger is anticipated to close in early in the week of August 20, 2023. As of August 28, 2023, B. Riley Financial led the equity financing to facilitate the acquisition, Riley invested $216.5 million of new capital. Other institutional, financial and strategic investors invested approximately $280 million of additional equity capital. Sullivan & Cromwell LLP served as legal counsel to B. Riley in connection with its investment in FRG and the credit facility.

Jefferies LLC is serving as financial advisor to the Special Committee and David A. Katz and Zachary S. Podolsky of Wachtell, Lipton, Rosen & Katz is serving as legal counsels to the Special Committee. David W. Ghegan of Troutman Pepper Hamilton Sanders LLP is serving as legal counsel to Franchise Group. Willkie Farr & Gallagher LLP is serving as legal counsel for Brian Kahn. Sullivan & Cromwell LLP is serving as legal counsel for B. Riley Financial, Inc. Christopher Nairn-Kim of Davis Polk & Wardwell LLP is serving as legal counsel for Irradiant Partners.

Senior management team of Franchise Group, Inc. led by Brian Kahn, Chief Executive Officer completed the acquisition of remaining 64% stake in Franchise Group, Inc. (NasdaqGM:FRG) on August 21, 2023.