Franchise Group ups term loan to $1 billion, cuts Libor floor

By Sara Rosenberg

New York, Feb. 22 – Franchise Group Inc. upsized its term loan B to $1 billion from $750 million and canceled plans for a committed $250 million last-out term loan, according to a market source.

Also, the Libor floor on the term loan was lowered to 0.75% from 1% and the original issue discount firmed at 99, the tight end of the 98.5 to 99 talk, the source said.

The term loan is still priced at Libor plus 500 basis points.

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

Recommitments are due at 5 p.m. ET on Tuesday, the source added.

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 $300 million second-lien term loan that was added to replace $300 million of proposed unsecured debt.

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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