Franchise Group to launch $750 million term loan on Wednesday

By Sara Rosenberg

New York, Feb. 2 – Franchise Group Inc. is set to hold a lender call at 11 a.m. ET on Wednesday to launch a $750 million first-out term loan, according to a market source.

J.P. Morgan Securities LLC, Citizens Bank and Credit Suisse Securities (USA) LLC provided the debt commitment.

Price talk on the term loan is Libor plus 500 basis points with a 1% Libor floor and an original issue discount of 98.5 to 99, the source said.

Commitments are due at 5 p.m. ET on Feb. 17, the source continued.

Proceeds will be used to help fund the acquisition of Pet Supplies Plus and to refinance an existing term loan.

Under the agreement, Pet Supplies Plus, a Livonia, Mich.-based omnichannel retail chain and franchisor of pet supplies and services, is being bought from Sentinel Capital Partners for about $700 million.

Other funds for the transaction will come from a $250 million last-out term loan that has been committed to and $300 million of unsecured financing that has also been committed to, another source added.

Closing is expected in March, subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Franchise Group is a Virginia Beach, Va.-based operator of franchised and franchisable businesses, including Liberty Tax Service, Buddy’s Home Furnishings, American Freight and the Vitamin Shoppe.

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