USA - Rent-A-Center franchisees David Paris, Mike Ackerman, Vik Patel, and Sanjay Patel have sold 64 stores to Directional Capital in a life-changing deal, as noted by the Franchise Times. The deal had been listed with brokers for over a year and had been in the hands of hundreds if not thousands of private equity companies, family offices, and institutional investors with limited success. However, Chris Wunder and Chaz Cervino from Leap Brands were able to successfully introduce the buyers and sellers within hours of being engaged to work their network.
The franchise partnership completed its first partial exit by selling the Rent-A-Center stores to Directional Capital. The partnership, which also owns units in Take Five Oil Change shops, RimTyme aftermarket wheel and tire sellers, and Popeyes restaurants, has been able to navigate the uncertain economic climate by remaining a minority investor in the group's portfolio.
The group had almost stopped looking, planning to hold the asset and sell at a later date if they could pique more interest. However, the sellers asked Leap Brands, a consulting firm that specializes in mergers and acquisitions for franchise businesses, to take a last-ditch effort with their network. Despite looking for "back ups," every other group Leap Brands spoke with had already viewed the deal and deemed it as "not the right fit for their portfolio" or the multiple didn't align with their investment criteria.
Paris had interviewed 12 different institutions a couple of years back in an effort to find a buyer. "We started down the road with one and they had many deals on their plate, so when we weren't getting enough attention from them, we pulled the plug." After asking Leap Brands to step in, they were introduced to Directional Capital and its private equity backer within hours. Negotiations ensued, leading to the monumental sale.
About the Groups Involved
Paris and Ackerman
Paris and Ackerman are partners at the Paris Ackerman Law Firm. Paris Ackerman LLP is a well-known law firm in the legal industry with a reputation for being skilled dealmakers. Their team consists of professionals who specialize in structuring, negotiating, and completing complicated and sophisticated transactions across a wide range of industries. They are recognized for their legal and financial expertise in franchise, licensing and distribution, commercial real estate, leasing, and general business law.
Paris Ackerman LLP's transactional attorneys are well-versed in representing multi-unit operators in major franchise systems throughout the United States, as well as other established business owners, real estate investors, and entrepreneurs. They pride themselves on being a business-focused law firm that measures success based on client satisfaction and growth.
The Patels have been Paris and Ackerman’s operating partners through their management company, Purple Square. Purple Square Management Co. was established in Tampa, Florida in 2006 with a clear vision to transform beloved brands into even more exceptional ones. The company achieves this by closely managing every touchpoint of the guest experience, ensuring that it always exceeds expectations. Purple Square now owns and operates over 245 franchise locations across 14 states. The company is on track to reach over 280 locations by the end of 2023, thanks to its successful development pipeline.
Purple Square's true purpose is not just to own and operate businesses but to be in the people business. The company is committed to delivering outstanding guest experiences, providing quick and efficient service, maintaining clean and comfortable locations, and ensuring that every guest leaves with a smile. The driving force behind Purple Square's success is its people, who are considered the company's most important assets. The company invests in its people, and their mission has always been to make the customer's experience exceptional from beginning to end.
Directional Capital, a private equity firm based in Delaware, has extensive experience investing in middle-market companies that are led by entrepreneurs seeking liquidity events in specialized industries. The firm has established relationships with well-known institutional investors with over $5 billion in assets under management, as well as family offices with over $500 million in assets under management. These relationships allow Directional Capital to create customized deal structures for each investment opportunity, providing a unique approach to equity investments in market-leading businesses.
The firm's primary focus is on making equity investments in partnership with proven managers, where Directional Capital can offer more than just financial support. The team at Directional Capital is led by senior investment professionals Dwayne Boothe and Corey Printup, who have a combined experience of over 30 years in sponsoring entrepreneurs and building successful businesses. Collectively, the partners at Directional Capital have invested over $500 million in equity capital to support leveraged buyout transactions.
Leap Brands has a reputation for being successful in the franchise mergers and acquisitions space. The company has helped many businesses navigate the complex process of selling their franchises and has a network of interested buyers in the industry. Their extensive network allowed the buyers and the sellers to meet within hours of the franchisees’ request. Aside from M&A Leap Brands specializes in executive recruiting for private equity firms across multiple disciplines and functions. Leap has placed hundreds of employees over the past 6 years.