NEW YORK, NEW YORK -- (Marketwired) -- 05/03/13 -- Macquarie Group Limited (the "Offeror") has acquired, through its wholly-owned subsidiary Boketo LLC ("Boketo"), 62,212,600 shares of Series A Preferred Stock (the "Preferred Shares") of Franchise Services of North America Inc. ("FSNA"), and certain rights to acquire additional Preferred Shares upon the exercise of outstanding options convertible into FSNA common shares ("FSNA Shares"), pursuant to an agreement and plan of merger dated as of July 13, 2012 among Adreca Holdings Corp. ("Adreca"), Boketo, FSNA, and Advantage Company Holdings, Inc. ("Advantage Holdings"), as amended (the "Merger Agreement").
Pursuant to the Merger Agreement, on May 3, 2013 Advantage Holdings, a wholly-owned subsidiary of FSNA, merged with and into Adreca, a wholly-owned subsidiary of Boketo, with Adreca continuing as the surviving entity (the "First Merger"). In consideration for the First Merger, 62,212,600 Preferred Shares, and certain rights to acquire additional Preferred Shares upon the exercise of outstanding options convertible into FSNA Shares, were issued to Boketo. Immediately following the completion of the First Merger, Adreca was merged with and into FSNA, with FSNA continuing as the surviving entity.
Each Preferred Share is convertible, upon satisfaction of certain conditions, into one FSNA Share, subject to customary anti-dilution provisions. Immediately following the First Merger, the Offeror held 62,212,600 Preferred Shares representing 49.76% of the issued and outstanding FSNA Shares on an as-converted basis. If outstanding options are converted into FSNA Shares, Boketo will be issued up to an additional 9,330,556 Preferred Shares to maintain its 49.76% interest in FSNA on an as-converted basis. Prior to the First Merger, the Offeror did not own any securities of FSNA. The Offeror does not own any securities of FSNA other than the 62,212,600 Preferred Shares acquired pursuant to the First Merger and the rights to acquire additional Preferred Shares upon the exercise of certain outstanding options convertible into FSNA Shares. A holder of Preferred Shares is entitled to that number of votes on all matters presented to holders of FSNA Shares equal to the number of FSNA Shares then issuable upon conversion of such Preferred Shares.
Boketo, FSNA and Thomas P. McDonnell, III (the "Principal Stockholder") have entered into a stockholders agreement (the "Stockholders Agreement") providing for, among other things, voting alignment between Boketo and the Principal Stockholder and transfer restrictions with respect to their securities of FSNA. Boketo and FSNA have entered into a registration rights agreement (the "Registration Rights Agreement") granting Boketo certain demand and piggyback registration rights.
The preceding summaries of the Merger Agreement, the Stockholders Agreement and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to those agreements, which are available on SEDAR at www.sedar.com.
The Offeror acquired the Preferred Shares for investment purposes. The Offeror may from time to time, depending on market and other conditions, and subject to the terms and conditions of the Stockholders Agreement, FSNA's certificate of incorporation and applicable law, increase or decrease its holdings of securities of FSNA.
The consideration provided by the Offeror to FSNA for the Preferred Shares was the First Merger.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Macquarie Group Limited
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OCTOBER 31, 2014
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