Franchise Services of North America (FSNA) released a press announcement Aug. 28 detailing the acquisition of Advantage Rent-A-Car, which is pending until the Hertz Corp.’s acquisition of Dollar Thrifty is completed. (You can read here the Aug. 27 announcement on the merger agreement reached by Dollar Thrifty and Hertz.)
FSNA, a public company, and its new partner Macquarie Capital — which served as an adviser to FSNA in the deal — have signed a purchase agreement with the Hertz Corp. to acquire Advantage once certain divested assets from Dollar Thrifty meet Federal Trade Commission regulations.
Macquarie has indirectly committed $15 million in equity capital in order to fund the total consideration for assets. Upon completion of the transaction, the Advantage brand will be included in FSNA’s portfolio, which will result in Macquarie holding 49.76% in equity capital of FSNA, which intends to operate Advantage as an independent brand.
“We plan to continue the development of the brand both domestically and internationally,” said Sandy Miller, co-chairman and co-CEO of FSNA. “We welcome the Advantage employees and their customers and are committed to making this a seamless transition for all.”
In addition to meeting regulatory requirements, the Dollar Thrifty shareholders must approve the acquisition, according to Hertz's announcement. And for FSNA, its shareholders must also approve the transaction for Advantage, according to the FSNA press release.
“We also believe that in many instances, an opportunity will exist for our franchisees to expand their offerings, and this will mean an incremental opportunity for our insurance divisions,” said Tom McDonnell, co-Chairman and co-CEO of FSNA.
Also according to the release, Macquarie will operate Advantage from 62 locations in the U.S., which includes certain former Thrifty locations, where Advantage will operate from new in-terminal markets. The acquisition will expand on FSNA’s current leisure car rental presence, which consists of 28 franchised airport locations that operate under the U-Save Car & Truck Rental brand globally.
The transaction is expected by all companies to be completed by the fourth quarter of this year, and is also pending approval from Canada's TSX Venture Exchange.
FSNA said in the release as well that it intends to seek shareholder approval for the relocation of its headquarters to the state of Delaware and to set the number of directors to seven. According to the release, FSNA shareholders holding more than 662/3% of common shares have entered into agreements to vote their common shares in favor of the merger and the relocation of FSNA to Delaware.
This article was updated at 12:51 p.m. on Aug. 29, 2012.
To read past coverage of the merger-related news on Dollar Thrifty, click here.
