Liberty Tax has struck a deal with Sears Hometown & Outlet Stores to acquire the Outlet part of that company’s business as well as, in an affiliated transaction, a group of franchised Buddy’s Home Furnishings stores in an all-cash transaction valued at up to $132.9 million.
Liberty already is the parent company of Liberty Tax Service and Buddy’s Home Furnishings.
The acquisition including the Sears Outlet operation is an important step forward in the evolution of Liberty Tax strategic objectives, the company stated, and constitutes the follow up to the July 2019 acquisition of Buddy’s Home Furnishings and the proposed acquisition of The Vitamin Shoppe announced earlier in August. The portfolio of Sears Outlet retail stores and distribution capabilities will add complementary products and sales channels, Liberty Tax maintained, and enable it to offer high quality home goods to consumers, while also providing unique value propositions. Upon the closing of the sale, Liberty Tax will control a store portfolio including several hundred retail locations with a combination of company operated and franchisee operated stores.
Liberty Tax intends to finance the transaction through a combination of new debt, balance sheet cash and/or an equity contribution from an affiliate of Vintage Capital Management.
Andrew Laurence, Liberty Tax’s board of directors chairman, stated, “We are excited about the acquisition of Sears Outlet and its unique model that offers its customers in-store and online access to outlet-value products across a broad assortment of merchandise categories, while serving as a valuable supply chain partner for its vendors. This is a continuation of Liberty Tax’s strategy of identifying and acquiring franchised or franchisable businesses while also building scale at attractive acquisition valuations. It’s an exciting time for Liberty Tax and its shareholders as we begin to recognize the strength in our future-facing franchise business model.”