Franchise Services of North America provides an update on the sale of Advantage assets to Hertz and Avis
TSX-V Trading Symbol: FSN
RIDGELAND, MS, May 30, 2014 /PRNewswire/ - FRANCHISE SERVICES OF NORTH AMERICA INC. ("FSNA" or the "Company") (FSN.V) provides the following update on the previously announced proposed sale of 22 United States airport concession agreements (the "Locations") used in the business of the Company's wholly-owned subsidiary, Simply Wheelz LLC ("Simply Wheelz"), which formerly did business as Advantage Rent A Car ("Advantage").
The United States Federal Trade Commission today announced its approval of the sale of twelve of the Locations to Avis Budget Car Rental, LLC ("Avis") and ten Locations to The Hertz Corporation ("Hertz"). Avis and Hertz were previously selected as successful bidders for the Locations in accordance with bidding procedures approved by the United States Bankruptcy Court for the Southern District of Mississippi (the "Court") in the Simply Wheelz insolvency proceedings.
Pursuant to binding term sheets agreed to by the respective parties and approved by the Court: (i) Avis will acquire 12 Locations (the "Avis Asset Sale") for consideration of approximately US$6 million in cash, plus the assumption of certain liabilities of the Advantage business associated with such Locations; and (ii) Hertz will acquire 10 Locations (the "Hertz Asset Sale") for consideration of approximately US$200,000 in cash, plus the assumption of certain liabilities of the Advantage business associated with such Locations and the continued right of Advantage to use Hertz's vehicle fleet during April, May and June 2014, which the parties agreed had a value of approximately US$3.5 million.
Completion of the sale of each individual Location may remain subject to receipt of appropriate third party approvals in respect of such Location; however, the total consideration for the Avis Asset Sale will be payable by Avis upon closing of the sale of the first Location pursuant to the Avis Asset Sale and the total consideration for the Hertz Asset Sale will be payable by Hertz upon closing of the sale of the first Location pursuant to the Hertz Asset Sale.
The sale of all Locations pursuant to the Avis Asset Sale and the Hertz Asset Sale is currently expected to be completed by the end of June 2014.
Simply Wheelz filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code on November 5, 2013.
FSNA is a publicly traded company listed on the TSX Venture Exchange. The Company and its subsidiaries own the following brands: U-Save Car & Truck Rental® ("U-Save"), 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 900 locations throughout the United States and is one of North America's largest franchise car rental companies. U-Save currently services 19 airport markets in 13 different states. Although primarily based in the United States, U-Save has 18 international locations in Mexico, Greece, the Middle East, Latin America, and the Caribbean.
Practicar Systems Inc. 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 61 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.
Certain statements made in this news release are forward-looking in nature, including statements concerning the ability of Simply Wheelz to complete the Avis Asset Sale and the Hertz Asset Sale and the time at which such sales might be completed; the assets being purchased by Avis and Hertz under the Avis Asset Sale and the Hertz Asset Sale, respectively; and the liabilities being assumed by Avis and Hertz under the Avis Asset Sale and the Hertz Asset Sale, respectively. 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. The forward-looking statements contained in this news release are based on certain key expectations and assumptions made by FSNA, including with respect to the ability of the Company to obtain third party and regulatory approvals required to complete the Avis Asset Sale and the Hertz Asset Sale on a timely basis, or at all. 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. These forward-looking statements also involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of FSNA to differ materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements. If any such risks actually occur, they could materially and adversely affect FSNA's business, financial condition or results of operations. 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 news release, and except as required by applicable securities 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.