B. Riley Financial, Inc. (NasdaqGM:RILY) and Irradiant Partners, LP along with senior management lead by Brian Kahn with affiliates and related parties of the senior management team entered into a definitive agreement to acquire 64% stake in Franchise Group, Inc. (NasdaqGM:FRG) for an enterprise value of approximately $2.6 billion on May 10, 2023. The consideration includes Company’s net debt and outstanding preferred stock. Under the terms of the proposed merger, Franchise Group common stockholders, other than the Management Group (the “Public Stockholders”), will receive $30.00 in cash for each share of Franchise Group common stock they hold. This represents a premium of 31.9% to the Company’s unaffected closing common stock price on March 17, 2023, the last trading day before the Company announced the receipt of an unsolicited proposal to acquire the Company from a third party. The Management Group has agreed to rollover their shares of common stock of the Company in connection with, and vote their shares of common stock in favor of, the proposed merger, with such voting obligation terminating should the Merger Agreement be validly terminated, including in connection with a “superior proposal.” The consortium has also received definitive financing commitments from third party lenders and institutional investors, including B. Riley Financial Inc. and Irradiant Partners, to finance a portion of the purchase price. Upon completion of the proposed merger, Franchise Group will become a private company and will no longer be publicly listed or traded on NASDAQ. Franchise Group’s management team, including Brian Kahn, is expected to continue to lead the Company. Franchise Group plans to continue to operate its current portfolio of highly recognized brands.

The proposed merger is anticipated to close in the second half of 2023, subject to satisfaction or waiver of customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Act and the approval of the Company’s stockholders, including approval by a majority of the shares of common stock of the Company not owned or controlled by the Management Group or other members of the buyer consortium. The Merger Agreement also includes a 30 day “go shop” period that will allow the Company to affirmatively solicit alternative proposals from interested parties. The independent directors of Franchise Group’s Board of Directors have unanimously approved the proposed merger based upon the unanimous recommendation of a Special Committee of the Board of Directors, which was composed of independent directors not affiliated with the Management Group and was advised by its own financial and legal advisors.

Jefferies LLC is serving as financial advisor to the Special Committee and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to the Special Committee. Troutman Pepper Hamilton Sanders LLP is serving as legal counsel to Franchise Group. Tariq Mundiya, Russell Leaf, Jared Fertman, Jeffrey Daniel, Andres Mena and Charlotta Chung of Willkie Farr & Gallagher LLP is serving as legal counsel for Brian Kahn. Sullivan & Cromwell LLP is serving as legal counsel for B. Riley Financial, Inc. Davis Polk & Wardwell LLP is serving as legal counsel for Irradiant Partners.