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Tag: franchising

Va. Beach-based company to acquire pet supply chain for $700M

Virginia Beach-based franchise business operator Franchise Group Inc. announced Monday it will acquire Livonia, Michigan-based Pet Supplies Plus for approximately $700 million.

The all-cash transaction is expected to close in March. The Pet Supplies Plus retail chain was founded in 1988 and sells pet supplies and services at its more than 500 locations, almost 60% of which are franchised. It currently has a backlog of 185 new locations and also provides delivery and pickup for its products.

“We look forward to welcoming Pet Supplies Plus, its management team, employees, franchisees and neighbors to Franchise Group when this transaction closes,” Franchise Group President and CEO Brian Kahn said in a statement. “PSP adds another franchise concept with strong unit economics, diversification into an economically resilient and secularly growing pet industry and a brand that has and will continue to experience robust unit expansion from its franchise system.”

Pet Supplies Plus estimates 2020 systemwide revenue as $1.2 billion. Franchise Group in 2019 reported $2.1 billion in revenue and focuses on buying and investing in franchises and franchise-able businesses.

“The additional scale and diversification that PSP will afford Franchise Group is expected to immediately lead to lower costs of capital and expanded free cash-flow generation,” Kahn said in a statement.

The Franchise Group last year acquired Buddy’s Home Furnishings, The Vitamin Shoppe, Sears Outlet and American Freight. The company has also entered into commitments arranged by J.P. Morgan, Citizens Bank and Credit Suisse for $1.3 billion in new term loan credit facilities to refinance the company’s term loan for Buddy’s Home Furnishings, American Freight and Liberty Tax businesses and provide financing for the Pet Supplies Plus transaction.

Riley Securities served as financial adviser and Willkie Farr & Gallagher LLP served as legal counsel to Franchise Group. Pet Supplies Plus used Pipe Sandler, North Point and Baird as financial advisers and Kramer Levin as legal counsel.

 

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Herndon franchise software firm buys Canadian tech platform

Herndon-based franchise management software company FranConnect announced Tuesday it has acquired Quebec, Canada-based FranchiseBlast.

Financial terms of the transaction were not disclosed. 

The FranConnect platform assists with sales, operations and marketing for more than 800 brands worldwide. FranchiseBlast is a developer of a software platform for the franchise industry which works to streamline scheduling, performing, analyzing and working on field audits. Founded in 2007, FranchiseBlast represents more than 100 franchise brands.

“With FranchiseBlast’s capabilities in field audits, self-assessments and reach into the unit level, we saw an enormous opportunity to enhance FranConnect’s enterprise operations and performance management solution to deliver an unmatched platform for brands seeking to drive operational success across the franchise system,” FranConnect CEO Gabby Wong said in a statement.

“Now that FranchiseBlast is part of FranConnect, our customers will have access to and integration with the full breadth of the FranConnect enterprise growth platform, including services and support from the largest and most-established software company in franchising,” FranchiseBlast President Jason Kealey said in a statement.

 

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