Liberty Tax has embarked on a dramatically new direction in which the company acquires franchised or complimentary businesses. That includes its purchase this month of Buddy’s Newco, which operates most of Buddy’s Home Furnishings business, for about $25 million.Liberty Tax will remain a publicly traded company and the tax preparation business and Buddy’s will operate as standalone companyiss. The public parent will change its name to Franchise Group Inc. The purchases is being made possible by affiliates of Vintage Capital Management, whose Vintage Tributum, acquired the shares for former CEO John Hewitt almost year ago
Liberty will launch a tender offer of $12 per share of its common shares with Vintage and B. Riley Financial agreeing not to tender their shares.
One Vintage affiliate received 2.083 million shares in Liberty for $25 million used in the deal while Buddy’s borrowed about $83 million in cash. With Buddy’s existing debt being repaid the announcement said Liberty and its subsidiaries would realize net proceeds of about $80 million from all these moves.