Franchise Services of North America Inc. (formerly known as Rent-a-Wreck Capital Inc.) announces that it has completed a business combination transaction first announced on October 13, 2006 resulting in the combination of the company with U-Save Auto Rental of America, Inc. (U-Save), a privately held company, based in Jackson, Mississippi. The transaction has not yet received final approval of the TSX Venture Exchange (TSX-V). Subject to receipt of final approval of the TSX-V, trading in RAWC shares will resume on or about, December 5, 2006. Blackmont Capital Inc. acted as sponsor of the transaction.
The transaction resulted in the former shareholders of U-Save holding 94.25 percent of the outstanding shares of FSNA, and the shareholders of the Company prior to the completion of the transaction holding 5.75 percent of the outstanding shares of FSNA. The transaction was approved at a Special Meeting of holders of common shares of the company held on November 30, 2006. In connection with the transaction, shareholders also approved a consolidation of the company’s common shares on a 4.0785967 for-one-basis (effective November 30, 2006) and a change in the name of the company from “Rent-A-Wreck Capital Inc.” to “Franchise Services of North America Inc.”
Upon completion of the transaction on November 30, 2006, Thomas P. McDonnell, III and Sanford Miller acquired beneficial ownership over 22,685,635 common shares and 16,682,686 common shares, respectively, representing 40.96 percent and 30.12 percent, respectively, of the issued and outstanding common shares of the Company.
McDonnell and Miller, who were appointed as Co-Chief Executive Officers of the company upon completion of the transaction, were previously the principal beneficial shareholders of U-Save. The common shares of the Company that were acquired by Messrs. McDonnell and Miller were issued from treasury. Neither Mr. McDonnell nor Mr. Miller previously held any common shares of the Company and each participated in the transaction for investment purposes.
In connection with the business combination transaction, FSNA successfully closed two concurrent private placements led by, respectively, Blackmont Capital Inc. and Meridian Merchant Capital Canada Ltd., for gross proceeds of $3.5 million. The proceeds of these private placements will be used to expand the Rent-A-Wreck brand in Canada, introduce U-Save into Canada, retire debt of FSNA, and expand its marketing and sales activities.
Board of Directors: Sanford Miller, Tom McDonnell, Dave Forseth, Phil DeLeon, Vicki Pyne
Senior Management Team:
Sanford Miller - Co-Chief Executive Officer
Tom McDonnell - Co-Chief Executive Officer
Robert M. Barton - Executive Vice President & Chief Operating Officer
O. Kendall Moore - Vice President, General Counsel & Secretary
Henri Lefebvre - Chief Accounting Officer & Canadian General Manager
Ashley Chambliss - Controller, US Operations
Through its two operating subsidiaries, U-Save Auto Rental of America, Inc. and Practicar Systems Inc., the company grants franchises for the operation of vehicle rental stores under the U-SAVE and Rent-A- Wreck brands. For more information, call (403) 259-6666 or visit www.usave.com.