CALGARY, Dec. 12, 2012 /CNW/ - FRANCHISE SERVICES OF NORTH AMERICA INC. ("FSNA" or the "Company") (TSX-V: FSN) announces that Adreca Holdings
Corp. ("Adreca"), a subsidiary of Macquarie Capital ("Macquarie
Capital"), has closed its acquisition of Simply Wheelz, LLC, the owner
and operator of the Advantage® Rent A Car brand ("Advantage"), from
Hertz Global Holdings, Inc. ("Hertz") today.
FSNA's previously announced acquisition of Advantage will proceed by way
of merger (the "Merger") between a wholly-owned subsidiary of FSNA and
Adreca. The Merger is expected to close in the first quarter of 2013
and is more fully described in the appendix to the Company's press
release dated August 28, 2012.
In conjunction with its acquisition of Advantage, Macquarie Capital
agreed that Adreca will also acquire on-airport concessions at an
additional 13 airports from Hertz. As Advantage already operates
off-airport locations servicing three of these airports, the
acquisition of these on-airport concessions will represent a net
increase of 10 new locations. As a result, pending the Merger, the
Company may acquire up to 72 rental locations in new markets in the
United States. The prospect of acquiring these additional airports was
previously detailed by the Company's November 20, 2012 press release.
Adreca's acquisition of these additional airports and certain other
divested assets from Hertz is expected to close in stages beginning in
the first quarter of 2013. Adreca will be Hertz' sole divestiture
partner in conjunction with the dispositions required to be made by
Hertz by the consent decree issued by the United States Federal Trade
Commission, previously detailed by the Company's November 20, 2012
As previously described by the Company's August 28, 2012 press release,
FSNA and Adreca have entered into a management services agreement (the
"Management Services Agreement") pursuant to which FSNA will provide
Adreca with certain management services in respect of Advantage and the
other assets divested by Hertz pending closing of the Merger. As
consideration for the services provided under the Management Services
Agreement, FSNA shall be entitled to its costs plus 25% in respect of
services provided by FSNA employees and to recover its costs in respect
of all other services. In addition, FSNA has been issued a warrant of
Adreca (the "Warrant") entitling FSNA to receive 35% of the common
shares of Adreca in certain circumstances as consideration for, among
other things, the services provided under the Management Services
Agreement. The Warrant is only exercisable if the Merger has not been
consummated by May 9, 2013 or as otherwise set out in the Merger
Commenting on the recent developments, Thomas P. McDonnell, III, the
Company's Chief Executive Officer and Chairman said, "This is a great
day for FSNA, our partner Macquarie Capital, and the over 600 employees
of Advantage Rent A Car. We are all excited to become North America's
fourth largest car rental company, and we look forward to continuing a
legacy of great service to our customers, both new and old."
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 is 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 transaction will be
completed as proposed, or at all.
Investors are cautioned that, 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.
The TSX Venture Exchange has in no way passed upon the merits of the
transaction and has neither approved nor disapproved the contents of
this press release.
Certain statements made in this news release are forward looking in
nature, including statements made with respect to the Merger. 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 the satisfaction of conditions to the
completion of the Merger. 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. There can be no assurance that the Merger will be
completed as proposed or at all. 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 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:
On FSNA or any of its operating subsidiaries please contact:
Thomas P. McDonnell, III
Franchise Services of North America Inc.