Franchise Group plans $475 million term loan via Irradiant for buyout

By Sara Rosenberg

New York, June 8 – Franchise Group Inc. has a commitment for a $475 million senior secured term loan from Irradiant Partners LP to help fund its acquisition by members of senior management led by Brian Kahn, the company’s chief executive officer, in financial partnership with a consortium that includes B. Riley Financial Inc. and Irradiant, according to a PREM14A filed with the Securities and Exchange Commission on Thursday.

Other funds for the transaction are expected to come from up to $560 million of equity.

The company expects that its existing first-lien credit agreement dated as of March 10, 2021 with JPMorgan Chase Bank will remain outstanding following completion of the buyout.

In addition, the company expects to purchase about $175 million of its existing second-lien loans from the lenders and Alter Domus (US) LLC upon closing.

Under the acquisition agreement, the buyout group is purchasing the roughly 64% of the company’s issued and outstanding common stock that the management group does not presently own or control for $30 in cash per share. The transaction has an enterprise value of about $2.6 billion, including net debt and outstanding preferred stock.

Closing is expected in the second half of this year, subject to customary conditions, including regulatory approval and stockholder approval.

Franchise Group is a Delaware, Ohio-based owner and operator of franchised and franchisable businesses.

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