Franchise Services of North America Inc (TSX Venture: FSN) announced that a Mississippi bankruptcy court has appoved the sale to Canadian private equity firm Catalyst Capital Group of certain assets of its subsidiary Simply Wheelz LLC, which does business as leased vehicle fleet operator Advantage Rent A Car. The previously announced transaction is expected to be completed in the first quarter of 2014, subject to procedural matters and arrangements with third parties. Franchise Services, which has its Canadian head office in Calgary, acquired Advantage from Hertz Global Holdings Inc in 2012.
Franchise Services of North America announces court approval of Advantage asset sale to Catalyst and officer departure
RIDGELAND, MS, Jan. 6, 2014
FRANCHISE SERVICES OF NORTH AMERICA INC. (“FSNA” or the “Company”) (FSN.V) announces that the United States Bankruptcy Court for the Southern District of Mississippi (the “Bankruptcy Court”) has declared that The Catalyst Group, Inc. (on behalf of one or more funds managed by it) (“Catalyst”) is the prevailing purchaser in the auction of certain of the assets of the Company’s wholly-owned subsidiary, Simply Wheelz LLC (“Simply Wheelz”), which does business as Advantage Rent A Car (“Advantage”), and has approved the sale of the Advantage assets to Catalyst free of all liens and other encumbrances. The auction was conducted in accordance with bidding procedures (the “Bid Procedures”) approved by the Bankruptcy Court as part of the Simply Wheelz insolvency proceedings. Sixt SE has been declared the back-up bidder under the Bid Procedures in the event that Simply Wheelz is not able to complete the sale transaction with Catalyst within the specified period of time.
Simply Wheelz hopes to complete its sale to Catalyst in the first quarter of 2014. However, the Company cautions that there are a number of procedural matters and arrangements with third parties that will need to be completed before such sale can be consummated. Simply Wheelz filed for U.S. federal bankruptcy protection on November 6, 2013.
The Company also announces that Robert M. Barton has ceased to serve as President and Chief Operating Officer of the Company. Mr. Barton’s responsibilities as the Company’s President and Chief Operating Officer have been temporarily assumed by Thomas P. McDonnell, III, the Company’s Chief Executive Officer and Chairman.
FSNA is a publicly traded company listed on the TSX Venture Exchange. The Company and its subsidiaries own the following brands: Advantage Rent A Car, 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.
The Company operates the Advantage car rental brand at 72 corporate locations in 33 states including airport locations servicing 60 of the top 70 airports across the United States.Advantage is the fourth largest independent rental car company in the United States.
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 its sale transaction with Catalyst and the time at which such sale might be completed. 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 its ability to complete a sale transaction with Catalyst and the time at which such sale might be completed. 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. Such factors include risks discussed in the section entitled “Risk Factors” in FSNA’s management information circular dated March 28, 2013 filed with Canadian securities regulators. 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.
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