Business
B. Riley Leads Financing for Management Buyout of Franchise Group
LOS ANGELES, Aug. 28, 2023 /PRNewswire/ -- B. Riley Financial, Inc. (Nasdaq: RILY) ("B. Riley" or the "Company"), a diversified financial services platform,
About this update from Brc Group Holdings, Inc.
[{"type":"text","content":"LOS ANGELES, Aug. 28, 2023 /PRNewswire/ -- B. Riley Financial, Inc. (Nasdaq: RILY) (\"B. Riley\" or the \"Company\"), a diversified financial services platform, announced it led the equity financing to facilitate the $2.8 billion management-led acquisition of Franchise Group, Inc. (\"FRG\") which was completed on August 21, 2023.\n\n \n \n \n \n \n \n\n \nB. Riley invested $216.5 million of new capital in the transaction. Other institutional, financial and strategic investors invested approximately $280 million of additional equity capital in the new FRG alongside significant rollover equity contributions from FRG management. As result of the completed transaction, the management-led consortium has acquired all the outstanding and issued common and preferred stock of FRG.\nBryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: \"We are pleased that our committed equity backstop played a role in the ability to structure and successfully close this transaction. We are also pleased to have the opportunity to invest alongside FRG management and other co-investors in addition to a select group of institutions and strategic partners.\"\n\"This is our second time taking a meaningful position in FRG. B. Riley was an investor in Liberty Tax which ultimately became FRG in 2018. That initial investment generated a total IRR of over 30% for our shareholders. Our ability to support our clients as a strategic partner is a core strategy of our business and one we believe serves as a key differentiator for our platform. We are also thankful for our relationship with our lenders which has provided us additional flexibility to serve our clients and shareholders with approximately $300 million of cash and near-term liquidity,\" added Riley.\nNew Credit Facility\nB. Riley entered into a new credit agreement with certain of its existing lenders, providing for a $600 million secured credit facility, of which a portion of proceeds were used to finance the Company's equity investment in FRG and retire its previous $380 million credit facility.\nBrian Kahn, Chief Executive Officer of Franchise Group, added: \"B. Riley has been instrumental in contributing to Franchise Group's growth dating back to its predecessor, Liberty Tax. Over the last five years, B. Riley has consistently supported us with creative capital solution...