SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT UNDER SECTION 13(E)
OF THE SECURITIES ACT OF 1934
Amendment No. 3
Franchise Group, Inc.
(Name of the Issuer)
Franchise Group, Inc.
Freedom VCM, Inc.
Freedom VCM Subco, Inc.
Freedom VCM Holdings, LLC
Freedom VCM Interco Holdings, Inc.
Brian R. Kahn
Vintage Opportunity Partners, L.P.
Vintage Capital Management LLC
Brian Kahn and Lauren Kahn Joint Tenants by
Entirety
Andrew Laurence
Kenneth Todd Evans
Eric F. Seeton
Andrew F. Kaminsky
B. Riley Financial, Inc.
Bryant R. Riley
(Names of Persons Filing Statement)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
35180X105
(CUSIP Number of Class of Securities)
| |
Brian R.
Kahn |
|
|
|
Tiffany
McMillan-McWaters |
Freedom VCM, Inc.
Freedom VCM Subco, Inc.
Freedom VCM Interco Holdings, Inc.
Freedom VCM Holdings, LLC
Brian R. Kahn
Vintage Opportunity Partners, L.P.
Vintage Capital Management LLC
Brian Kahn and Lauren
Kahn Joint Tenants
by
Entirety |
Bryant
R. Riley
B. Riley Financial, Inc. |
|
Kenneth Todd Evans
Eric F. Seeton
|
Franchise Group, Inc.
109 Innovation Court, Suite J |
8529 Southpark Circle,
Suite 150 |
11100 Santa Monica Blvd,
Suite 800 |
Andrew
Laurence
627 Harland St. |
Andrew F. Kaminsky
109 Innovation Court, Suite J |
| Delaware, OH 43015 |
Orlando, FL 32819 |
Los Angeles, CA 90025 |
Milton, MA 02186 |
Delaware, OH 43015 |
| (740) 363-2222 |
(407) 592-8015 |
(818) 884-3737 |
(740) 363-2222 |
(740) 363-2222 |
(Name, Address, and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of the Persons Filing Statement)
With copies to
David W. Ghegan
Betty Linkenauger Segaar |
David A.
Katz
Zachary S. Podolsky |
Patrick S.
Brown
Sullivan & Cromwell LLP |
|
Russell Leaf
Willkie Farr & Gallagher LLP |
|
Troutman Pepper Hamilton
Sanders LLP
|
Wachtell, Lipton, Rosen &
Katz
|
1888 Century Park East,
Suite 2100 |
|
787
Seventh Avenue New York, NY 10019 |
|
600 Peachtree Street
NE,
Suite 3000 |
51
West 52nd Street
New
York, NY 10019 |
Los
Angeles, CA 90067
(310)
712-6003 |
|
(212) 728-8000 |
|
| Atlanta, GA 30308 |
(212) 403-1000 |
|
|
|
|
| (404) 885-3000 |
|
|
|
|
|
This statement is filed in connection with (check the appropriate
box):
| a. |
x |
The filing
of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under
the Securities Exchange Act of 1934. |
| b. |
¨ |
The filing of a registration
statement under the Securities Act of 1933. |
| c. |
¨ |
A tender offer. |
| d. |
¨ |
None of the above. |
Check the
following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: x
Introduction
This Amendment No. 3 to the Transaction Statement
on Schedule 13E-3 (which we refer to as this “Amended Transaction Statement”) is being filed with the U.S. Securities
and Exchange Commission (which we refer to as the “SEC”) pursuant to Section 13(e) of the Securities Exchange
Act of 1934, as amended (which we refer to, together with the rules and regulations promulgated thereunder, as the “Exchange
Act”), by (1) Franchise Group, Inc., a Delaware corporation (which we refer to as “FRG” or the
“Company”); (2) Freedom VCM, Inc., a Delaware corporation (which we refer to as “Parent”);
(3) Freedom VCM Subco, Inc., a Delaware corporation and an indirectly wholly-owned subsidiary of Parent (which we refer to
as “Merger Sub”); (4) Freedom VCM Holdings, LLC, a Delaware limited liability company; (5) Freedom VCM Interco
Holdings, Inc., a Delaware corporation; (6) Brian R. Kahn (7) Vintage Opportunity Partners, L.P., a Delaware limited partnership;
(8) Vintage Capital Management LLC, a Delaware limited liability company (9) Brian Kahn and Lauren Kahn Joint Tenants by Entirety;
(10) Andrew Laurence; (11) Kenneth Todd Evans; (12) Eric F. Seeton; (13) Andrew F. Kaminsky; (14) B. Riley Financial, Inc.,
a Delaware corporation (which we refer to as the “Guarantor” or “B. Riley”); and (15) Bryant R. Riley.
The persons filing this Amended Transaction Statement are collectively referred to as the “Filing Persons”.
This Amended Transaction Statement relates to
the Agreement and Plan of Merger, dated as of May 10, 2023 (which we refer to, as it may be amended from time to time, as the
“Merger Agreement”), by and among the Company, Parent and Merger Sub. If the Merger Agreement is adopted by the
Company’s stockholders and the other conditions under the Merger Agreement are either satisfied or waived, the Merger Sub will
be merged with and into the Company (which we refer to as the “Merger”), with the Company surviving the Merger as
a wholly-owned subsidiary of Parent. At the effective time of the Merger, each outstanding share of common stock, par value $0.01
per share, of the Company (which we refer to as “FRG Common Stock”) (other than (x) shares of FRG Common
Stock and shares of FRG Series A Preferred Stock owned by the Guarantor or any wholly-owned subsidiary of the Guarantor, Parent
or any wholly-owned subsidiary of Parent, Merger Sub, the Company or any wholly-owned subsidiary of the Company, and in each case
not held on behalf of third parties, (y) shares of FRG Common Stock that are owned by stockholders of the Company who did not
vote in favor of the Merger Agreement or the Merger and who have perfected and not withdrawn a demand for appraisal rights pursuant
to Section 262 of the Delaware General Corporation Law (which we refer to as the “DGCL”) and (z) shares
of FRG Common Stock owned by Brian R. Kahn, Vintage Opportunity Partners, L.P., Brian Kahn and Lauren Kahn Joint Tenants by
Entirety, Andrew Laurence and the other Rollover Stockholders (as defined in the accompanying Proxy Statement) (which we refer to,
each, as a “Rollover Stockholder” and collectively, as the “Rollover Stockholders”) and
subject to the Rollover Contribution Agreement, dated as of May 10, 2023, as amended, by and among Freedom VCM Holdings, LLC
and the Rollover Stockholders (such shares, the “Rollover Shares”) (the shares of FRG Common Stock subject to
clauses (x), (y) and (z) above, we refer to collectively as the “Excluded Shares”)) will be converted
into the right to receive $30.00 in cash per share, without interest (which we refer to as the “Per Share Merger
Consideration”). Following the completion of the Merger, FRG Common Stock will be delisted from the Nasdaq Global Select
Market, will be deregistered under the Exchange Act and will cease to be publicly traded.
The board of directors of the Company (which we
refer to as the “Board”) formed a special committee (which we refer to as the “Special Committee”)
consisting solely of independent and disinterested directors to, among other things, evaluate the Merger. After reviewing the terms of
the Merger Agreement with its independent legal and financial advisors, the Special Committee unanimously (A) approved and declared
advisable the Merger Agreement, the Voting Agreement, dated as of May 10, 2023, by and among Parent, Brian R. Kahn, Vintage Opportunity
Partners, L.P., Brian Kahn and Lauren Kahn Joint Tenants by Entirety and Andrew Laurence (which we refer to as the “Voting Agreement”),
and the transactions contemplated by the Merger Agreement, (B) determined that the Merger Agreement, the Voting Agreement and the
transactions contemplated by the Merger Agreement are fair to, and in the best interests of, the Company and the holders of FRG Common
Stock (other than the holders of Excluded Shares and shares of FRG Common Stock held by Rollover Stockholders), and (C) resolved
to recommend to the Board that the holders of FRG Common Stock (other than the Rollover Stockholders) adopt the Merger Agreement at a
special meeting of stockholders.
Based on the Special Committee’s recommendation,
the Board, by a unanimous vote of the Company’s directors (other Mr. Kahn who recused himself due to his status as a Rollover
Stockholder) has (i) (A) approved and declared advisable the Merger Agreement, the Voting Agreement and the transactions contemplated
by the Merger Agreement, (B) determined that the Merger Agreement, the Voting Agreement and the transactions contemplated by the
Merger Agreement were fair to, and in the best interests of, the Company and the holders of FRG Common Stock, other than Excluded Shares
and shares of FRG Common Stock held by Rollover Stockholders, and (C) resolved to recommend that the holders of FRG Common Stock
adopt the Merger Agreement at a special meeting of stockholders and (ii) directed that the Merger Agreement be submitted to the
holders of FRG Common Stock for their adoption at such special meeting.
On July 14, 2023, the Company filed a
definitive proxy statement (which we refer to as the “Proxy Statement”) under Regulation 14A of the Exchange Act with
the SEC, pursuant to which the Company is soliciting proxies from stockholders of the Company in connection with the Merger. The Proxy
Statement is attached hereto as Exhibit (a)(1). A copy of the Merger Agreement is attached to the Proxy Statement as Annex A and
is incorporated herein by reference. Terms used but not defined in this Amended Transaction Statement have the meanings assigned to them
in the Proxy Statement.
Concurrently with the filing of this Amended Transaction
Statement, the Company is filing definitive additional proxy soliciting materials under Regulation 14A of the Exchange Act with the SEC,
a copy of which is attached hereto as Exhibit (a)(8), to amend and supplement the Proxy Statement.
Pursuant to General Instruction F to Schedule
13E-3, the information in the Proxy Statement, including all annexes thereto, is expressly incorporated by reference herein in its entirety,
and responses to each item herein are qualified in their entirety by the information contained in the Proxy Statement. The cross-references
below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information
required to be included in response to the items of Schedule 13E-3.
All information contained in, or incorporated
by reference into, this Amended Transaction Statement concerning each Filing Person has been supplied by such Filing Person. No Filing
Person, including the Company, is responsible for the accuracy of any information supplied by any other Filing Person.
Item 1. Summary Term Sheet (Regulation M-A Item 1001)
The information set forth in the Proxy Statement
under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
Item 2. Subject Company Information (Regulation M-A Item
1002)
(a) Name
and address. The Company’s name, and the address and telephone number of its principal executive offices are:
Franchise Group, Inc.
109 Innovation Court, Suite J
Delaware, Ohio 43015
(740) 363-2222
(b) Securities.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Questions and Answers About the Special
Meeting and the Merger—How many votes do I have?”
“The Special Meeting—Record Date and
Quorum”
“Other Important Information Regarding the
Company—Security Ownership of Certain Beneficial Owners and Management”
(c) Trading
market and price. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“Other Important Information Regarding the
Company—Market Price of Common Stock and Dividends”
(d) Dividends.
The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“Other Important Information Regarding the
Company—Market Price of Common Stock and Dividends”
(e) Prior
public offerings. Not applicable.
(f) Prior
stock purchases. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“Other Important Information Regarding the
Company—Certain Transactions in the Shares of FRG Common Stock”
Item 3. Identity and Background of Filing Person (Regulation
M-A Item 1003)
(a) – (b) Name
and Address of Each Filing Person; Business and Background of Entities. The information set forth in the Proxy Statement under the
following captions is incorporated herein by reference:
“Summary Term Sheet—Parties to the
Merger”
“Parties to the Merger”
“Other Important Information Regarding the
Company”
“Other Important Information Regarding the
Consortium Members”
“Where You Can Find More Information”
(c) Business
and Background of Natural Persons. The information set forth in the Proxy Statement under the following captions is incorporated
herein by reference:
“Other Important Information Regarding the
Company”
“Other Important Information Regarding the
Consortium Members”
“Where You Can Find More Information”
Item 4. Terms of the Transaction (Regulation M-A Item 1004)
(a) Material
terms.
(1) Tender
offer. Not applicable
(2) Merger
or Similar Transactions.
(i) The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Effective Time of
the Merger”
“Special Factors—Payment of Merger
Consideration”
“The Merger Agreement—Closing and
Effective Time of the Merger”
“The Merger Agreement—Treatment of
Capital Stock”
“The Merger Agreement—Treatment of
Company Equity Awards”
“The Merger Agreement—Conditions to
the Merger”
(ii) The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Payment of Merger
Consideration”
“The Merger Agreement—Treatment of
Capital Stock”
“The Merger Agreement—Treatment of
Company Equity Awards”
“The Merger Agreement—Surrender and
Payment Procedures”
(iii) The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Opinion of Special
Committee’s Financial Advisor”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
“Special Factors—Plans for the Company
After the Merger”
“Special Factors—New Management Arrangements”
“Special Factors—Unaudited Prospective
Financial Information of the Company”
(iv) The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Questions and Answers About the Special
Meeting and the Merger”
“The Merger Agreement—Other Covenants
and Agreements—The Special Meeting”
“The Special Meeting—Vote Required”
“The Special Meeting—Management Stockholders’
Obligation to Vote in Favor of the Merger”
“The Voting Agreement”
(v) The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger”
(vi) The
information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“Special Factors—Accounting Treatment”
(vii) The
information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“Special Factors—Material U.S. Federal
Income Tax Consequences of the Merger”
(c) Different
terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger”
“Special Factors—Guarantee”
“The Merger Agreement—Treatment of
Capital Stock”
“The Merger Agreement—Treatment of
Company Equity Awards”
“The Merger Agreement—Directors’
and Officers’ Indemnification and Insurance”
“The Voting Agreement”
“The Rollover Agreement”
(d) Appraisal
rights. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Appraisal Rights”
“Annex C—Section 262 of the General
Corporation Law of the State of Delaware”
(e) Provisions
for unaffiliated security holders. The information set forth in the Proxy Statement under the following caption is incorporated herein
by reference:
“Special Factors—Provisions for Unaffiliated
Stockholders”
(f) Eligibility
for listing or trading. Not applicable.
Item 5. Past Contacts, Transactions, Negotiations and Agreements
(Regulation M-A Item 1005)
(a)(1) – (2) Transactions.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Special Factors—Background of the
Merger”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger”
“The Merger Agreement—Treatment of
Capital Stock”
“The Merger Agreement—Treatment of
Company Equity Awards”
“Other Important Information Regarding the
Company—Certain Transactions in the Shares of FRG Common Stock”
“The Voting Agreement”
“The Rollover Agreement”
(b) – (c) Significant
corporate events; Negotiations or contacts. The information set forth in the Proxy Statement under the following captions is incorporated
herein by reference:
“Summary Term Sheet”
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger”
“Special Factors—Financing of the
Merger”
“Special Factors—Guarantee”
“The Merger Agreement”
“The Voting Agreement”
Annex A—Agreement and Plan of Merger
Annex D—Voting Agreement
Annex E—Rollover Agreement
Annex F—Guarantee
(e) Agreements
involving the subject company’s securities. The information set forth in the Proxy Statement under the following captions is
incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Plans for the Company
After the Merger”
“Special Factors—Financing of the
Merger”
“The Merger Agreement”
“The Voting Agreement”
“The Rollover Agreement”
“The Special Meeting—Vote Required”
“The Special Meeting—Management Stockholders’
Obligation to Vote in Favor of the Merger”
“Other Important Information Regarding the
Company—Certain Transactions in the Shares of FRG Common Stock”
Annex A—Agreement and Plan of Merger
Annex D—Voting Agreement
Annex E—Rollover Agreement
Annex F—Guarantee
Item 6. Purposes of the Transaction, and Plans or Proposals
(Regulation M-A Item 1006)
(b) Use
of securities acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Plans for the Company
After the Merger”
“Special Factors—New Management Arrangements”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Certain Effects of
the Merger for Parent”
“Special Factors—Certain Effects on
the Company if the Merger Is Not Completed”
“Special Factors—Payment of Merger
Consideration”
“Special Factors—Financing of the
Merger”
“The Merger Agreement—Treatment of
Capital Stock”
“The Merger Agreement—Treatment of
Company Equity Awards”
“Delisting and Deregistration of FRG Common
Stock”
(c)(1) – (8) Plans.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
“Special Factors—Plans for the Company
After the Merger”
“Special Factors—New Management Arrangements”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Certain Effects of
the Merger for Parent”
“Special Factors—Certain Effects on
the Company if the Merger Is Not Completed”
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger”
“Special Factors—Financing of the
Merger”
“The Merger Agreement—Effects of the
Merger; Directors and Officers; Articles of Incorporation; Bylaws”
“The Merger Agreement—Closing and
Effective Time of the Merger”
“The Merger Agreement—Treatment of
Capital Stock”
“The Merger Agreement—Treatment of
Company Equity Awards”
“The Merger Agreement—Conduct of the
Company’s Business During the Pendency of the Merger”
“The Voting Agreement”
“The Rollover Agreement”
“Other Important Information Regarding the
Company—Directors and Executive Officers of the Company”
“Other Important Information Regarding the
Company—Market Price of Common Stock and Dividends”
“Delisting and Deregistration of Common
Stock”
Annex A—Agreement and Plan of Merger
Annex D—Voting Agreement
Annex E—Rollover Agreement
Item 7. Purposes, Alternatives, Reasons and Effects (Regulation
M-A Item 1013)
(a) Purposes.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
“Special Factors—Plans for the Company
After the Merger”
“Special Factors—New Management Arrangements”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Certain Effects of
the Merger for Parent”
(b) Alternatives.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
(c) Reasons.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
“Special Factors—Opinion of the Special
Committee’s Financial Advisor”
“Special Factors—Unaudited Prospective
Financial Information of the Company”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Certain Effects of
the Merger for Parent”
Annex B—Opinion of Jefferies LLC
(d) Effects.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
“Special Factors—Plans for the Company
After the Merger”
“Special Factors—New Management Arrangements”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Certain Effects of
the Merger for Parent”
“Special Factors—Certain Effects on
the Company if the Merger Is Not Completed”
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger”
“Special Factors—Material U.S. Federal
Income Tax Consequences of the Merger”
“Special Factors—Accounting Treatment”
“Special Factors—Financing of the
Merger”
“Special Factors—Fees and Expenses”
“Special Factors—Payment of Merger
Consideration”
“The Merger Agreement—Effects of the
Merger; Directors and Officers; Articles of Incorporation; Bylaws”
“The Merger Agreement—Treatment of
Capital Stock”
“The Merger Agreement—Treatment of
Company Equity Awards”
“The Merger Agreement—Conduct of the
Company’s Business During the Pendency of the Merger”
“Other Important Information Regarding the
Company—Market Price of FRG Common Stock and Dividends”
“Delisting and Deregistration of FRG Common
Stock”
Annex A—Agreement and Plan of Merger
Item 8. Fairness of the Transaction (Regulation M-A Item
1014)
(a) – (b) Fairness;
Factors considered in determining fairness. The information set forth in the Proxy Statement under the following captions is incorporated
herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Opinion of the Special
Committee’s Financial Advisor”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger”
Annex B—Opinion of Jefferies LLC
Presentation of Jefferies LLC to the Special Committee,
dated as of April 14, 2023, is attached hereto as Exhibit (c)(1) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of April 19, 2023, is attached hereto as Exhibit (c)(2) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of April 26, 2023, is attached hereto as Exhibit (c)(3) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of April 28, 2023, is attached hereto as Exhibit (c)(4) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of May 8, 2023, is attached hereto as Exhibit (c)(5) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of May 9, 2023, is attached hereto as Exhibit (c)(6) and is incorporated herein by reference.
(c) Approval
of security holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of Consortium
Members as to the Fairness of the Merger”
“The Merger Agreement—Conditions to
the Merger”
“The Special Meeting—Vote Required”
Annex A—Agreement and Plan of Merger
(d) Unaffiliated
representative. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Opinion of the Special
Committee’s Financial Advisor”
(e) Approval
of directors. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Opinion of the Special
Committee’s Financial Advisor”
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger”
“The Merger (The Merger Agreement Proposal—Proposal
1)”
(f) Other
offers. Not applicable.
Item 9. Reports, Opinions, Appraisals and Negotiations (Regulation
M-A Item 1015)
(a) – (c) Report,
opinion or appraisal; Preparer and summary of the report, opinion or appraisal; Availability of documents. The information set forth
in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Opinion of the Special
Committee’s Financial Advisor”
“Where You Can Find More Information”
Annex B – Opinion of Jefferies LLC
Presentation of Jefferies LLC to the Special Committee,
dated as of April 14, 2023, is attached hereto as Exhibit (c)(1) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of April 19, 2023, is attached hereto as Exhibit (c)(2) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of April 26, 2023, is attached hereto as Exhibit (c)(3) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of April 28, 2023, is attached hereto as Exhibit (c)(4) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of May 8, 2023, is attached hereto as Exhibit (c)(5) and is incorporated herein by reference.
Presentation of Jefferies LLC to the Special Committee,
dated as of May 9, 2023, is attached hereto as Exhibit (c)(6) and is incorporated herein by reference.
The reports, opinions or appraisals referenced
in this Item 9 will be made available for inspection and copying at the principal executive offices of the Company during its regular
business hours by any interested equity security holder of the Company or representative who has been so designated in writing.
Item 10. Source and Amounts of Funds or Other Consideration
(Regulation M-A Item 1007)
(a) – (b) Source
of funds; Conditions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Special Factors—Financing of the
Merger”
“The Merger Agreement—Financing”
“Special Factors—Guarantee”
The Second Lien Credit Agreement, dated as of March 10,
2021, among the Company, certain affiliates of the Company, the lenders party thereto from time to time and Alter Domus (US) LLC
(c) Expenses.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Fees and Expenses”
“The Merger Agreement—Termination
Fees and Expenses”
“The Special Meeting—Solicitation
of Proxies; Payment of Solicitation Expenses”
(d) Borrowed
funds. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Financing of the
Merger”
“The Merger Agreement—Financing”
The Second Lien Credit Agreement, dated as of March 10,
2021, among the Company, certain affiliates of the Company, the lenders party thereto from time to time and Alter Domus (US) LLC
Item 11. Interest in Securities of the Subject Company (Regulation
M-A Item 1008)
(a) Securities
ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger”
“Other Important Information Regarding the
Company—Security Ownership of Certain Beneficial Owners and Management”
(b) Securities
transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Other Important Information Regarding the
Company—Certain Transactions in the Shares of Common Stock”
Item 12. The Solicitation or Recommendation (Regulation
M-A Item 1012)
(d) Intent
to tender or vote in a going-private transaction. The information set forth in the Proxy Statement under the following captions is
incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
“The Special Meeting—Management Stockholders’
Obligation to Vote in Favor of the Merger”
“The Special Meeting—Vote Required”
“The Voting Agreement”
“The Rollover Agreement”
Annex D—Voting Agreement
Annex E—Rollover Agreement
(e) Recommendation
of others. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Reasons for the Merger;
Recommendation of the Special Committee and the Board; Fairness of the Merger”
“Special Factors—Position of the Consortium
Members as to the Fairness of the Merger”
“Special Factors—Purpose and Reasons
of the Consortium Members for the Merger”
“The Merger (The Merger Agreement Proposal—Proposal
1)”
Item 13. Financial Information (Regulation M-A Item 1010)
(a) Financial
statements. The audited consolidated financial statements set forth in Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the financial statements set forth in Item 1 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended April 1, 2023 are incorporated herein by reference.
The information set forth in the Proxy Statement
under the following captions is incorporated herein by reference:
“Special Factors—Certain Effects of
the Merger”
“Special Factors—Unaudited Prospective
Financial Information of the Company”
“Other Important Information Regarding the
Company—Book Value per Share”
“Where You Can Find More Information”
(b) Pro
forma information. Not applicable.
Item 14. Persons/Assets, Retained, Employed, Compensated or
Used (Regulation M-A Item 1009)
(a) – (b) Solicitations
or recommendations; Employees and corporate assets. The information set forth in the Proxy Statement under the following captions
is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers About the Special
Meeting and the Merger”
“Special Factors—Background of the
Merger”
“Special Factors—Fees and Expenses”
“The Special Meeting—Solicitation
of Proxies; Payment of Solicitation Expenses”
Item 15. Additional Information (Regulation M-A Item 1011)
(b) Golden
Parachute Compensation. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Special Factors—Interests of Executive
Officers and Directors of the Company in the Merger—Golden Parachute Compensation”
“Merger-Related Executive Compensation Arrangements
(The Merger-Related Compensation Proposal—Proposal 3)”
(c) Other
material information. The information set forth in the Proxy Statement, including all annexes thereto, is incorporated herein by
reference.
Item 16. Exhibits (Regulation M-A Item 1016)
(a)(1) Definitive Proxy Statement of Franchise Group, Inc. (the “Proxy Statement”) (incorporated herein by reference to the Schedule 14A filed concurrently with the SEC).
(a)(2) Form of Proxy Card (incorporated herein by reference to the Proxy Statement).
(a)(3) Letter to Franchise Group, Inc. Stockholders (incorporated herein by reference to the Proxy Statement).
(a)(4) Notice of Special Meeting of Stockholders (incorporated herein by reference to the Proxy Statement).
(a)(5) Press Release, dated May 10, 2023 (incorporated herein by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on May 10, 2023).
(a)(6) Current Report on Form 8-K, dated May 10, 2023 (included in Schedule 14A filed on May 10, 2023 and incorporated herein by reference).
(a)(7) Current Report on Form 8-K, dated May 11, 2023 (included in Schedule 14A filed on May 11, 2023 and incorporated herein by reference).
(a)(8) Definitive Additional Proxy Soliciting Materials (included in Schedule 14A filed on August 8, 2023 and incorporated herein by reference).
(b)(1) The Second Lien Credit Agreement, dated as of March 10, 2021, among the Company, certain affiliates of the Company, the lenders party thereto from time to time and Alter Domus (US) LLC (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on March 15, 2021).
(c)(1) Presentation of Jefferies LLC to the Special Committee, dated as of April 14, 2023**.
(c)(2) Presentation of Jefferies LLC to the Special Committee, dated as of April 19, 2023**.
(c)(3) Presentation of Jefferies LLC to the Special Committee, dated as of April 26, 2023**.
(c)(4) Presentation of Jefferies LLC to the Special Committee, dated as of April 28, 2023**.
(c)(5) Presentation of Jefferies LLC to the Special Committee, dated as of May 8, 2023**.
(c)(6) Presentation of Jefferies LLC to the Special Committee, dated as of May 9, 2023**.
(c)(7) Opinion of Jefferies LLC, dated May 9, 2023 (incorporated herein by reference to Annex B of the Proxy Statement).
(d)(1) Agreement and Plan of Merger, dated as of May 10, 2023, by and among Franchise Group, Inc., Freedom VCM, Inc. and Freedom VCM Subco, Inc. (incorporated herein by reference to Annex A of the Proxy Statement).
(d)(2) Voting Agreement, dated as of May 10, 2023, by and among Freedom VCM, Inc., Franchise Group, Inc., Brian R. Kahn, Vintage Opportunity Partners, L.P., Brian Kahn and Lauren Kahn Joint Tenants by Entirety and Andrew Laurence (incorporated herein by reference to Annex D of the Proxy Statement).
(d)(3) Rollover Contribution Agreement, dated as of May 10, 2023, by and among Freedom VCM Holdings, LLC, Brian R. Kahn, Vintage Opportunity Partners, L.P., Brian Kahn and Lauren Kahn Joint Tenants by Entirety and Andrew Laurence (incorporated herein by reference to Annex E of the Proxy Statement).
(d)(4) Limited Guarantee, dated as of May 10, 2023, by B. Riley Financial, Inc. in favor of Franchise Group, Inc. (incorporated herein by reference to Annex F of the Proxy Statement).
(f) Section 262 of the General Corporation Law of the State of Delaware (incorporated herein by reference to Annex C of the Proxy Statement).
(g) None.
107 Filing Fee Table.*
| * |
Previously filed with the Schedule
13E-3 filed with the SEC on June 8, 2023. |
| |
|
| ** |
Previously filed with Amendment No. 1 to the Schedule
13E-3 filed with the SEC on July 6, 2023. |
SIGNATURE
After due inquiry and to the
best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated as of August 8, 2023
| |
FRANCHISE GROUP, INC. |
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|
|
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By: |
/s/ Andrew Kaminsky |
| |
|
Name: Andrew Kaminsky |
| |
|
Title: Executive Vice President and Chief Administrative
Officer |
| |
|
|
| |
FREEDOM VCM, INC. |
| |
|
|
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By: |
/s/ Brian R.
Kahn |
| |
|
Name: Brian R. Kahn |
| |
|
Title: President |
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|
|
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FREEDOM VCM SUBCO, INC. |
| |
|
|
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By: |
/s/ Brian R.
Kahn |
| |
|
Name: Brian R. Kahn |
| |
|
Title: President |
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|
|
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FREEDOM VCM HOLDINGS, LLC |
| |
|
|
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By: |
/s/ Brian R.
Kahn |
| |
|
Name: Brian R. Kahn |
| |
|
Title: President |
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|
|
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FREEDOM VCM INTERCO HOLDINGS, INC. |
| |
|
|
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By: |
/s/ Brian R.
Kahn |
| |
|
Name: Brian R. Kahn |
| |
|
Title: President |
| |
|
|
| |
BRIAN R. KAHN |
| |
|
|
| |
By: |
/s/ Brian R.
Kahn |
| |
|
Name: Brian R. Kahn |
| |
|
|
| |
VINTAGE OPPORTUNITY PARTNERS, L.P. |
| |
|
|
| |
By: |
/s/ Brian R.
Kahn |
| |
|
Name: Brian R. Kahn |
| |
|
Title: Manager |
[Signature Page to SC 13E-3]
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VINTAGE CAPITAL MANAGEMENT LLC |
| |
|
|
| |
By: |
/s/ Brian R.
Kahn |
| |
|
Name: Brian R. Kahn |
| |
|
Title: Manager |
| |
|
|
| |
BRIAN KAHN AND LAUREN KAHN JOINT TENANTS
BY ENTIRETY |
| |
|
|
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By: |
/s/ Brian R.
Kahn |
| |
|
Name: Brian R. Kahn |
| |
|
|
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By: |
/s/ Lauren Kahn |
| |
|
Name: Lauren Kahn |
| |
|
|
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ANDREW LAURENCE |
| |
|
|
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By: |
/s/ Andrew Laurence |
| |
|
Name: Andrew Laurence |
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|
|
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KENNETH TODD EVANS |
| |
|
|
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By: |
/s/ Kenneth
Todd Evans |
| |
|
Name: Kenneth Todd Evans |
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|
|
| |
ERIC F. SEETON |
| |
|
|
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By: |
/s/ Eric F.
Seeton |
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|
Name: Eric F. Seeton |
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|
|
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ANDREW F. KAMINSKY |
| |
|
|
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By: |
/s/ Andrew F.
Kaminsky |
| |
|
Name : Andrew F. Kaminsky |
| |
|
|
| |
B. RILEY FINANCIAL, INC. |
| |
|
|
| |
By: |
/s/ Bryant R.
Riley |
| |
|
Name: Bryant R. Riley |
| |
|
Title: Co-Chief Executive Officer |
| |
|
|
| |
BRYANT R. RILEY |
| |
|
|
| |
By: |
/s/ Bryant R.
Riley |
| |
|
Name: Bryant R. Riley |
[Signature Page to SC 13E-3]
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