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Franchise Group to acquire American Freight

Franchise Group Inc. on Dec. 30 announced that it has agreed to acquire furniture company American Freight Group Inc. from an affiliate of private equity firm The Jordan Company LP in an all-cash deal valued at about $450 million.

Franchise Group, which was formerly known as Liberty Tax Inc., plans to sign a $700 million credit facility with Kayne Anderson Capital Advisors LP and B. Riley Financial Inc.'s Great American Capital Partners LLC, which will provide the financing for the deal.

The financing also includes the refinancing of Virginia-based company's term loans for its Buddy's Home Furnishings and Sears Outlet businesses.

"American Freight's unmatched cash-on-cash unit economics make it an attractive opportunity for franchisees to benefit from a clear whitespace growth opportunity," Franchise Group President and CEO Brian Kahn said in a statement.

The company expects its systemwide revenue to exceed $2.4 billion once the deal closes.

The transaction and financing are expected to close simultaneously in the first quarter of 2020, subject to customary closing conditions and the expiration or termination of the applicable waiting period.

B. Riley FBR Inc. and Kayne served as advisers for the transaction.