Franchise Group, Inc. announced on Monday that it has entered into a definitive agreement under which it will acquire American Freight Group, Inc. (“American Freight”), a retail chain offering brand-name furniture, mattresses and home accessories at discount prices, in an all cash transaction valued at approximately $450 million from an affiliate of The Jordan Company, L.P. and other stockholders of American Freight. Upon the closing of the Transaction, Franchise Group’s systemwide revenue, which is defined as total sales for both franchise and company units, will exceed $2.4 billion.
American Freight is based in Delaware.
The transaction is expected to be completed in the first quarter of 2020, subject to conditions. Brian Kahn, President & CEO of Franchise Group said, “We are proud to welcome American Freight, its management team and employees to the Franchise Group. American Freight is a deep value, category-defining furniture retail model with a compelling, proven track record of growth and stability throughout economic cycles.” Mr. Kahn continued, “American Freight’s unmatched cash-on-cash unit economics make it an attractive opportunity for franchisees to benefit from a clear whitespace growth opportunity. We expect that combining American Freight with our similarly large-format Sears Outlet business and our small-format Buddy’s Home Furnishings business will generate significant economic synergies over time that will be realized from leveraging corporate overhead, vendor and franchisee partnerships, operating methods, and a common customer base.”
About Franchise Group, Inc.
Franchise Group, Inc. (NASDAQ: FRG) is an operator of franchised and franchisable businesses and uses its operating expertise to drive cost efficiencies and grow its brands. Franchise Group’s business lines include Liberty Tax Service, Buddy’s Home Furnishings, Sears Outlet and The Vitamin Shoppe. On a combined basis, Franchise Group operates over 4,300 locations predominantly located in the U.S. and Canada through company-run and franchising agreements.
According to Wikipedia, Franchise Group, based in Virginia Beach, Virginia, is the third largest tax preparation franchise in the United States.
About American Freight
Since 1994, American Freight Furniture has helped customers save money on quality furniture and mattresses. American Freight buys direct from manufacturers and sells direct in warehouse-style stores. By cutting out the middle-man and keeping its overhead costs low, it can offer quality, new furniture and mattresses at the lowest prices. American Freight offers same-day delivery on all in-stock items with flexible payment options including free layaway and take it home today for $50 with low, easy payment plans. With 176 stores and over 2 million satisfied customers, American Freight continues to grow while its mission remains the same: sell the best for less every day while delivering excellent customer service.
