Franchise Group enters into exclusive negotiations with

DELAWARE, Ohio, June 06, 2022 (GLOBE NEWSWIRE) — Franchise Group, Inc. (NASDAQ: FRG) (“Franchise Group”) announced today that it has entered into a three-week exclusive negotiation period to acquire Kohl’s Corporation for 60 $.00 per unit in cash.

If Franchise Group and Kohl’s Corporation enter into a definitive agreement, Franchise Group intends to contribute approximately $1 billion of capital to the transaction, all of which is expected to be funded by a corresponding increase in the size of its secured credit facilities. . A majority of the financing for the transaction is expected to be provided based on the real estate assets of Kohl’s Corporation. Other than the increase in Franchise Group’s secured credit facilities, no part of the financing of the transaction is expected to be recourse against Franchise Group.

Franchise Group remains committed to its prudent financial policies, including target leverage levels and maximizing free cash flow generation. If a transaction is completed, Franchise Group’s free cash flow, adjusted EBITDA and non-GAAP EPS are expected to increase significantly. The significant increase in free cash flow generation should support Franchise Group’s objective of increasing dividends and other capital returns for shareholders, while allowing Franchise Group to accelerate the pursuit of organic and inorganic investments. .

There can be no assurance that a transaction will result from ongoing discussions with Kohl’s Corporation. Franchise Group does not intend to comment further regarding these discussions unless and until it is appropriate to do so, or a formal agreement has been reached or transaction discussions are completed.

About Franchise Group, Inc.

Franchise Group is an owner and operator of franchise and franchiseable businesses that continually seeks to grow its brand portfolio while utilizing its operating and capital allocation philosophy to generate strong cash flow for its shareholders. Franchise Group businesses include Pet Supplies Plus, American Freight, The Vitamin Shoppe, Badcock Home Furniture and More, Buddy’s Home Furnishings and Sylvan Learning. On a combined basis, Franchise Group currently operates over 3,000 locations primarily in the United States that are either company-managed or operated under franchise and licensee agreements.

Forward-looking statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, projections, predictions, expectations or beliefs regarding future events or results. and are not statements of historical fact. . Such statements include all statements contained in this press release regarding the potential acquisition of Kohl’s Corporation, the timing thereof, whether such transaction proceeds and, if so, its effect on Franchise Group, any expected financial performance of Kohl’s Corporation or Franchise Group or the benefits Franchise Group currently expects to derive from the transaction, including that the transaction, if completed, would significantly increase free cash flow, adjusted EBITDA and non-GAAP EPS of Franchise Group or would allow it to increase dividends, shareholder returns, or organic or inorganic investments. These forward-looking statements are based on various assumptions at the time they are made and are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from any future result, performance or achievement expressed or implied by such forward-looking statements. Forward-looking statements are often accompanied by words that convey projected future events or results such as “expect”, “believe”, “estimate”, “plan”, “project”, “anticipate”, “have the intention, “will”, “may”, “view”, “opportunity”, “potential” or words of similar meaning or other statements concerning the opinions or judgment of the Company or its management on events future. Although the Company believes that its expectations with respect to forward-looking statements are based on reasonable assumptions within the limits of its current knowledge of its business and operations, there can be no assurance that the actual results, performance or achievements of the Company will not differ materially from any projected future results, performance or achievements expressed or implied by such forward-looking statements. Actual future results, performance or achievements may differ materially from historical or anticipated results depending on a variety of factors, many of which are beyond the Company’s control. We refer you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K for the period ended December 25, 2021, as well than the comparable sections of the company’s quarterly report. Reports on Form 10-Q and other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov. All forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. Readers are cautioned not to rely on any forward-looking statements contained in this press release. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update, revise or clarify such forward-looking statements, whether as a result of new information, future events or otherwise.

INVESTOR RELATIONS CONTACT:

Andrew F. Kaminsky
Executive Vice President and Administrative Director
Franchise Group, Inc.
[email protected]
(914) 939-5161

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