"

Estimated reading time: 2 minutes, 23 seconds

Parent Grows Liberty Tax as Sale Looms

The Franchise Group, parent to Liberty Tax, has outlined a plan to grow the tax preparation business despite the looming sale of Liberty. During its recent webcast for earnings for the year during December 31, the Franchise Group said it is planning on establishing Liberty offices and kiosks in locations of two of its other properties.

The webcast focused on business development for Liberty, including the plan to add Liberty offices and kiosks in the company’s American Freight and Buddy's stores for the current tax season. Liberty has about 2,490 franchised locations and 204 company-owned stores. American Freight has 300 locations, which include the former Sears Outlet stores, while Buddy’s has about 390 stores. Franchise Group CEO Brian Kahn did not state how many of these stores will be involved in the Liberty plan.

But it could bring the first significant addition to the number of Liberty locations since the end of the 2017 tax season when it had 3710 sites. During the same time, Liberty’s revenue had also declined.

The tax preparation business closed 2020 with $122.8 million in revenue. For the former fiscal year ended April 30, it had sales of $132.5 million.

In February, the parent said it has reached a definitive agreement to sell Liberty to the NextPoint Acquisition Corp. for a preliminary price of roughly $252 million with about $182 million in cash and an equity interest in the purchaser worth about $61 million. The deal is expected to close in the June quarter. NextPoint is a special acquisition company formed in British Columbia.

NextPoint is also buying LoanMe, an online provider of consumer and business loans, for about $102 million,  $18 million in cash  and approximately $49 million  payable in NextPoint common stock equivalents.

NextPoint says the combination of Liberty Tax and LoanMe will produce a  “one-stop financial services superstore destination for credit-challenged consumers and small businesses.”

Liberty Tax was the original public company. But after it was acquired in 2019 its name was changed to the Franchise Group, which began buying other franchise properties. Most of the other operating units were larger than Liberty, some several times its size.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Read 1832 times
Rate this item
(0 votes)

Visit other PMG Sites:

Template Settings

Color

For each color, the params below will give default values
Tomato Green Blue Cyan Dark_Red Dark_Blue

Body

Background Color
Text Color

Header

Background Color

Footer

Select menu
Google Font
Body Font-size
Body Font-family
Direction
PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.