Franchise Services of North America Inc. Provides Additional Details Regarding its Agreement to Acquire Advantage® Rent-A-Car Business; Announces Lifting of Trading Halt
CALGARY, Sept. 6, 2012 /CNW/ - FRANCHISE SERVICES OF NORTH AMERICA INC. ("FSNA" or the "Company") (TSX-V: FSN) announced on August 28, 2012 that it entered into an arm's length agreement on July 13, 2012 to acquire Simply Wheelz, LLC, a Delaware limited liability company and the owner of the Advantage® Rent-A-Car brand ("Advantage"), and certain other divested assets from Hertz Global Holdings, Inc. ("Hertz") (NYSE: HTZ). The acquisition will proceed by way of a merger between wholly owned subsidiaries of the Company and Macquarie Capital (the "Merger"). A wholly-owned subsidiary of Macquarie Capital has entered into a purchase agreement with Hertz for the acquisition of Advantage and certain other assets (the "Advantage Purchase Agreement").
Details Regarding the Provision of Historic Financial Information of Advantage
Pursuant to the Advantage Purchase Agreement, Hertz is obligated to use commercially reasonable efforts to provide certain carve-out financial statements in respect of Advantage, with the expectation that these financial statements will then be incorporated by FSNA into its circular to be prepared in connection with the Merger. The Advantage business was acquired by Hertz in 2009 out of bankruptcy protection in the United States and was subsequently integrated within Hertz's larger operations. Following that acquisition, Hertz did not treat Advantage as a separate and distinct division for accounting purposes. Accordingly, Hertz did not prepare stand-alone financial statements that were specific to Advantage. As a result, separate carve-out financial statements in respect of Advantage must be created where no such information previously existed. Completion of the financial statements in respect of Advantage is not within FSNA's control. As a result, the Company cannot be sure when it will receive these financial statements in respect of Advantage but does not expect these statements to become available for some time, and likely not before November 2012. Such financial statements will be summarized in a subsequent news release by the Company.
Investors are cautioned that there are currently no financial statements in respect of Advantage and there can be no assurance that such financial statements will be satisfactory to FSNA. Except as disclosed in the circular of FSNA to be prepared in connection with the Merger, any information released or received with respect to the Merger may not be accurate or complete and should not be relied upon. Trading in the securities of FSNA should be considered highly speculative.
Investors should be aware that successful completion of the Merger is subject to a number of conditions, including completion of Hertz's acquisition of Dollar Thrifty Automotive Group, Inc. and there is no assurance that such acquisition will be consummated.
Lifting of Trading Halt
The Company announces the lifting of the trading halt previously imposed on its common shares. In connection with the announcement of the Merger, and pending receipt and review of the applicable documentation by the TSX Venture Exchange (the "TSXV"), trading in the Company's common shares was halted on August 27, 2012 at the request of the Company. Trading of the Company's common shares on the TSXV is expected to resume on or about September 10, 2012.
Pursuant to TSXV policies, the Company intends to provide updates with respect to the status of the Merger and related issues, including updates regarding financial information in respect of Advantage.
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 Merger will be subject to a number of conditions, including TSX Venture Exchange acceptance and approval by the Company's shareholders. The Merger cannot close until all required approvals are obtained. There can be no assurance that the Merger will be completed as proposed, or at all.
The TSX Venture Exchange has in no way passed upon the merits of the Merger and has neither approved nor disapproved the contents of this press release.
Certain statements made in this press release are forward looking in nature, including statements made with respect to the Merger; the financial statements of Advantage; the anticipated timing to close the transaction; and other matters. The words "may," "could," "should," "would," "expect," "intend," "estimate," "anticipate," "believe," or "outlook" and similar expressions often identify forward-looking information. By their nature, forward-looking statements require FSNA to make assumptions and are subject to inherent risks and uncertainties and other factors that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, expectations and assumptions concerning the Merger and the satisfaction of conditions to the completion of the Merger the parties' ability to close the transaction and within the currently anticipated timeline; and the factors and assumptions discussed in the Company's Consolidated Financial Statements for the year ended September 30, 2011 and other documents filed with certain provincial securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Although FSNA believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because FSNA can give no assurance that they will prove to be correct. FSNA's forward-looking statements are qualified in their entirety by these cautionary statements. In addition, the forward-looking statements are made only as of the date of this press release, and except as required by applicable law, FSNA undertakes no obligation to publicly update these forward-looking statements to reflect new information, subsequent events or otherwise.
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.