Franchise Group [NASDAQ: FRG] Announces Acquisition of Sylvan Learning

Franchise Group, Inc. [NASDAQ: FRG] has confirmed the acquisition of Sylvan Learning. The firm has purchased Sylvan Learning in an all-cash transaction estimated at about $81 million. It has been disclosed that Franchise Group will utilize the cash on hand to finance the acquisition of Sylvan Learning.

The purchase of Sylvan Learning is anticipated to be immediately profitable to earnings and is likely to increase its discretionary cash flow generation. Franchise Group is looking forward to collaborating with Sylvan’s outstanding management team to speed up their expansion plans while utilizing the best practices to drive incremental efficiencies Franchise Group.

Furthermore, the addition of Sylvan offers Franchise Group another expanding franchise concept and further expansion into consumer services. Sylvan has been a leader in the educational services industry for many decades and provides appealing unit economics to its increasing franchisee base.

In addition, Sylvan is striving to increase its footprint and currently has more than 700 locations, in 49 states, including more than 560 physical centers, of which all but six are franchised. Sylvan’s omnichannel platform has better provide attractive unit economics to its franchisees.

Transaction Overview

Sylvan is predicting total systemwide revenue of about $169 million for Franchise Group’s fiscal year 2021, the revenue of about $30 million, and Adjusted EBITDA of about $12 million. Franchise Group anticipates that the Transaction will be immediately profitable to its Non-GAAP EPS in 2021. Franchise Group management will revise its guidance comprehensive of Sylvan when it reports its third-quarter financial results in November.