DELAWARE, Ohio, Sept. 27, 2021 (GLOBE NEWSWIRE) — Franchise Group, Inc. (NASDAQ: FRG) today announced that it has completed the acquisition of Sylvan Learning, a leading tutoring franchisor for Pre-K-12 students and families in the U.S., in an all cash transaction valued at approximately $81 million. The Transaction was financed with available cash.
Founded in 1979 and headquartered in Hunt Valley, Maryland, Sylvan is an established and growing franchisor of tutoring services. Sylvan addresses the full range of student needs with a broad variety of academic curriculums delivered in an omnichannel format. Sylvan has a growing footprint and currently has more than 700 locations, in 49 states, including more than 560 physical centers, of which all but six are franchised. Sylvan’s omnichannel platform has helped deliver attractive unit economics to its franchisees. The platform provides franchisees with the ability to provide a range of services, including on-premises, online, one-on-one and in group tutoring.
Brian Kahn, President & CEO of Franchise Group said, “We are very excited to welcome the Sylvan management team, employees, franchisees and students to Franchise Group. The addition of Sylvan provides Franchise Group another growing franchise concept and further diversification into consumer services. Sylvan has been a leader in the educational services industry for decades and offers attractive unit economics to its growing franchisee base. The acquisition is expected to be immediately accretive to earnings and is expected to expand our discretionary cash flow generation. We look forward to partnering with Sylvan’s outstanding management team to accelerate their expansion plans while leveraging Franchise Group’s best practices to drive incremental efficiencies.”
For Franchise Group’s fiscal year 2021, Sylvan is estimating total systemwide revenue of approximately $169 million, company revenue of approximately $30 million and Adjusted EBITDA of approximately $12 million. Franchise Group expects that the Transaction will be immediately accretive to its Non-GAAP EPS in 2021. Franchise Group management will update its guidance inclusive of Sylvan when it reports its third quarter financial results in November.
Willkie Farr & Gallagher LLP and DLA Piper LLP served as legal counsel to Franchise Group. Tyton Partners served as financial advisors to Sylvan Learning and Miles & Stockbridge as legal advisor.
About Franchise Group
Franchise Group is an owner and operator of franchised and franchisable businesses that continually looks to grow its portfolio of brands while utilizing its operating and capital allocation philosophy to generate strong cash flow for its shareholders. Franchise Group’s business lines include Pet Supplies Plus, American Freight, The Vitamin Shoppe, Buddy’s Home Furnishings and Sylvan Learning. On a combined basis, Franchise Group currently operates over 2,600 locations predominantly located in the U.S. that are either Company-run or operated pursuant to franchising agreements.
