Franchise Services of North America Inc. Announces Setting of First Closing Date for Acquisition of Advantage
- Hertz Acquisition of Dollar Thrifty Paves Way for Acquisition of Advantage -
CALGARY, Nov. 20, 2012 /CNW/ - FRANCHISE SERVICES OF NORTH AMERICA INC. ("FSNA" or the "Company") (TSX-V: FSN) wishes to provide an update on transaction timing further to its previous announcements relating to its agreement to acquire (the "Acquisition") Simply Wheelz, LLC, a Delaware limited liability company and the owner of the Advantage® Rent-A-Car brand ("Advantage"), and certain other divested assets (together, the "Assets") from Hertz Global Holdings, Inc. ("Hertz") (NYSE: HTZ). The Company also wishes to provide an update with regard to the Assets in accordance with the press release of Hertz identifying the potential for 13 additional on-airport concessions to be acquired by the Company.
Details Regarding the Hertz Acquisition of Dollar Thrifty
On November 15, 2012, the United States Federal Trade Commission ("FTC") issued a consent order that effectively completed the review of the Hertz acquisition of Dollar Thrifty Automotive Group Inc. ("Dollar Thrifty") by the FTC.
Hertz announced today that it has completed its acquisition of Dollar Thrifty.
The Company's successful completion of the acquisition of the Assets was subject to the completion of the Hertz acquisition of Dollar Thrifty.
Details Regarding Amendments to the Transaction
On August 28, 2012, the Company announced that, upon completion of the Acquisition, the Company would operate Advantage from 62 rental locations servicing airports across the United States. As a result of the FTC consent order, Hertz will be required to provide the Company, or another FTC-approved buyer, with the right to operate on-airport concessions at an additional 13 airports. As Advantage already operates off-airport locations servicing three of these airports, if the Company is the buyer of these additional locations, it will result in a net increase of 10 new locations for the Company. As a result, the Company may acquire up to 72 rental locations in new markets in the United States.
The Acquisition will proceed by way of the previously announced merger (the "Merger") between wholly-owned subsidiaries of the Company and Macquarie Capital. Macquarie Capital, through a wholly-owned subsidiary, has entered into a purchase agreement with Hertz for the acquisition of the Assets. Closing of the acquisition of Advantage by a subsidiary of Macquarie Capital is now scheduled to take place on December 12, 2012, with the closings of the remaining Assets to occur in 2013.
The Acquisition and Merger is expected to close in the first quarter of 2013 and is more fully described in the appendix to the Company's press release dated August 28, 2012.
FSNA is a publicly traded company listed on the TSXV. The Company and its subsidiaries own the following brands: U-Save Car & Truck Rental®, U-Save Car Sales, Rent-A-Wreck of Canada, PractiCar, Auto Rental Resource Center ("ARRC"), Xpress Rent A Car and Peakstone Financial Services.
U-Save, together with its subsidiary ARRC, has over 1,100 locations throughout the United States and is one of North America's largest franchise car rental companies. Having primarily serviced the local market for the past 30 years, the Company is expanding into the airport market with plans for the opening of airport locations in the top 30 markets in the United States and the major airports in Canada. U-Save currently services 28 airport markets in 11 different states and 7 countries. U-Save Car Sales is an expansion of the U-Save brand into the car sales market, and provides goods and services to car sales operators looking to affiliate with a national brand.
Practicar Systems Inc. (a wholly owned subsidiary of FSNA) owns the rights to the Rent-A-Wreck® and the PractiCar® trademarks for all of Canada. The Rent-A-Wreck® system operates a network of 68 franchise locations from coast-to-coast in Canada, providing a range of vehicle rental, leasing and sales options to its customers. The Rent-A-Wreck® system has been in continuous operation in Canada since 1976.
Completion of the transaction is subject to a number of conditions in addition to Hertz's acquisition of Dollar Thrifty, including TSX Venture Exchange acceptance and approval by the Company's shareholders. The transaction cannot close until all required approvals are obtained. There can be no assurance that the transaction will be completed as proposed, or at all.
The TSX Venture Exchange has in no way passed upon the merits of the transaction and has neither approved nor disapproved the contents of this press release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Franchise Services of North America Inc.