CALGARY, Sept. 6, 2012 /CNW/ - FRANCHISE SERVICES OF NORTH AMERICA INC. ("FSNA" or the "Company") (TSX-V: FSN) announced on August 28, 2012
that it entered into an arm's length agreement on July 13, 2012 to
acquire Simply Wheelz, LLC, a Delaware limited liability company and
the owner of the Advantage® Rent-A-Car brand ("Advantage"), and certain
other divested assets from Hertz Global Holdings, Inc. ("Hertz") (NYSE:
HTZ). The acquisition will proceed by way of a merger between wholly
owned subsidiaries of the Company and Macquarie Capital (the
"Merger"). A wholly-owned subsidiary of Macquarie Capital has entered
into a purchase agreement with Hertz for the acquisition of Advantage
and certain other assets (the "Advantage Purchase Agreement").
Details Regarding the Provision of Historic Financial Information of
Pursuant to the Advantage Purchase Agreement, Hertz is obligated to use
commercially reasonable efforts to provide certain carve-out financial
statements in respect of Advantage, with the expectation that these
financial statements will then be incorporated by FSNA into its
circular to be prepared in connection with the Merger. The Advantage
business was acquired by Hertz in 2009 out of bankruptcy protection in
the United States and was subsequently integrated within Hertz's larger
operations. Following that acquisition, Hertz did not treat Advantage
as a separate and distinct division for accounting purposes.
Accordingly, Hertz did not prepare stand-alone financial statements
that were specific to Advantage. As a result, separate carve-out
financial statements in respect of Advantage must be created where no
such information previously existed. Completion of the financial
statements in respect of Advantage is not within FSNA's control. As a
result, the Company cannot be sure when it will receive these financial
statements in respect of Advantage but does not expect these statements
to become available for some time, and likely not before November 2012.
Such financial statements will be summarized in a subsequent news
release by the Company.
Investors are cautioned that there are currently no financial statements
in respect of Advantage and there can be no assurance that such
financial statements will be satisfactory to FSNA. Except as disclosed
in the circular of FSNA to be prepared in connection with the Merger,
any information released or received with respect to the Merger may not
be accurate or complete and should not be relied upon. Trading in the
securities of FSNA should be considered highly speculative.
Investors should be aware that successful completion of the Merger is
subject to a number of conditions, including completion of Hertz's
acquisition of Dollar Thrifty Automotive Group, Inc. and there is no
assurance that such acquisition will be consummated.
Lifting of Trading Halt
The Company announces the lifting of the trading halt previously imposed
on its common shares. In connection with the announcement of the
Merger, and pending receipt and review of the applicable documentation
by the TSX Venture Exchange (the "TSXV"), trading in the Company's
common shares was halted on August 27, 2012 at the request of the
Company. Trading of the Company's common shares on the TSXV is
expected to resume on or about September 10, 2012.
Pursuant to TSXV policies, the Company intends to provide updates with
respect to the status of the Merger and related issues, including
updates regarding financial information in respect of Advantage.
FSNA is a publicly traded company listed on the TSXV. The Company and
its subsidiaries own the following brands: U-Save Car & Truck Rental®,
U-Save Car Sales, Rent-A-Wreck of Canada, PractiCar, Auto Rental
Resource Center ("ARRC"), Xpress Rent A Car and Peakstone Financial
U-Save, together with its subsidiary ARRC, has over 1,100 locations
throughout the United States and is one of North America's largest
franchise car rental companies. Having primarily serviced the local
market for the past 30 years, the Company is expanding into the airport
market with plans for the opening of airport locations in the top 30
markets in the United States and the major airports in Canada. U-Save
currently services 28 airport markets in 11 different states and 7
countries. U-Save Car Sales is an expansion of the U-Save brand into
the car sales market, and provides goods and services to car sales
operators looking to affiliate with a national brand.
Practicar Systems Inc. (a wholly owned subsidiary of FSNA) 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 68 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.
Completion of the Merger will be subject to a number of conditions,
including TSX Venture Exchange acceptance and approval by the Company's
shareholders. The Merger cannot close until all required approvals are
obtained. There can be no assurance that the Merger will be completed
as proposed, or at all.
The TSX Venture Exchange has in no way passed upon the merits of the
Merger and has neither approved nor disapproved the contents of this
Certain statements made in this press release are forward looking in
nature, including statements made with respect to the Merger; the
financial statements of Advantage; the anticipated timing to close the
transaction; and other matters. 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
and other factors that may cause the actual results, performance or
achievements to differ materially from the anticipated results,
performance or achievements expressed or implied by such
forward-looking statements. Such factors include, but are not limited
to, expectations and assumptions concerning the Merger and the
satisfaction of conditions to the completion of the Merger the parties'
ability to close the transaction and within the currently anticipated
timeline; and the factors and assumptions discussed in the Company's
Consolidated Financial Statements for the year ended September 30, 2011
and other documents filed with certain provincial securities
regulators. Readers are cautioned not to place undue reliance upon any
such forward-looking statements, which speak only as of the date made.
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. 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 press release, and except as required
by applicable 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.
For further information:
For further information on FSNA or any of its operating subsidiaries please contact:
Franchise Services of North America Inc.