Friday Dec 02, 2022

Franchise Group, Inc. Acquires W.S. Badcock Corporation – Yahoo Finance

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  • Transaction Expected to be Immediately Accretive to Earnings

  • Regional Furniture, Mattress, Appliance Retailer Expected to Present Significant Synergy Opportunity with Existing Home Furnishing Brands

  • Acquisition Financed with $575 Million Addition to Existing Credit Facility

  • Company To Provide Consolidated 2022 Financial Expectations Inclusive of Badcock in December

DELAWARE, Ohio, Nov. 22, 2021 (GLOBE NEWSWIRE) — Franchise Group, Inc. (NASDAQ: FRG) (“Franchise Group,” “FRG” or the “Company”) today announced that it has completed the acquisition of W.S. Badcock Corporation (“Badcock”), a leading home furnishings company in the Southeast U.S., in an all cash transaction valued at approximately $580 million (the “Transaction”).

Founded in 1904, W.S. Badcock Corporation operates 383 stores in eight southeastern states comprised of 68 corporate locations and 315 independent dealer owned stores. The stores are branded “Badcock Home Furniture & more” and carry a complete line of furniture, appliances, bedding, electronics, home office equipment, accessories and seasonal items.

“Protecting the legacy of our 117-year old family-owned business, which has been grown through five generations, our relationships with customers, vendors, dealers, employees, and our deep ties to the local communities in which we operate, have always been of utmost important to us,” said Bill Pou, Jr., Chairman of the Board of W.S. Badcock Corporation. Mr. Pou further commented, “We wanted to find a buyer who would respect our company’s long and storied history and, in Franchise Group, we immediately recognized a management group and a company that shared our values and will help W.S. Badcock build upon the legacy created by the current family and those who preceded us. We are confident that we are leaving our treasured company in good hands and that this decision will help to produce a winning combination for our customers, vendors, dealers and employees.”

Brian Kahn, President & CEO of Franchise Group, said, “A sincere thank you to the Badcock family for entrusting their 117-year legacy to Franchise Group. We are very excited to welcome the Badcock management team, employees, dealers and customers to Franchise Group. Besides potential significant standalone earnings accretion for the Company, the addition of Badcock adds scale to, and anticipated synergies with our existing home furnishings franchise concepts, which we are confident will specifically benefit American Freight and Buddy’s franchisees and customers. Over its long history, Badcock has allocated capital among three discrete business lines: a retail footprint consisting of 383 locations; a real estate portfolio consisting of three distribution centers, 38 retail locations, and 27 corporate and certain other locations; and a consumer credit business that currently includes approximately $550 million of gross receivables. We look forward to partnering with Badcock’s management team in assessing their highest and best uses of capital and evaluating alternatives for certain non-core assets to rapidly de-lever Franchise Group back to our target net leverage ratio of 2-3x adjusted EBITDA. We also look forward to evaluating and implementing programs that may offer Badcock customers more options and greater flexibility, which we think will lead to higher revenue and profitability for Badcock dealers, similar to the process that led to improved unit economics for our Buddy’s and American Freight brands.”

For Badcock’s fiscal year end June 30, 2021, Badcock generated consolidated revenue of approximately $901.9 million and Adjusted EBITDA of approximately $139.5 million. Revenue and …….

Source: https://finance.yahoo.com/news/franchise-group-inc-acquires-w-134500790.html

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