easyhome Ltd. Announces Sale of U.S. Franchise Business
MISSISSAUGA, ONTARIO - (Marketwired - Dec. 31, 2014) - easyhome Ltd. (TSX:EH) ("easyhome" or the "Company"), the Canadian leader in providing goods and financial services to the cash and credit constrained consumer, is pleased to announce the sale of its U.S. franchise business to its U.S. Master Franchisor, easygates LLC ("easygates") effective December 31, 2014.
"The sale of our U.S. franchise business to easygates is consistent with easyhome's strategic objectives of focusing on the Canadian marketplace by growing our easyfinancial consumer finance business and continuing to improve the profitability of our Canadian leasing business," said David Ingram, easyhome's President & CEO. "easygates has built a strong and experienced organization that is well positioned to grow and support the expanding U.S. franchise business. This transaction will allow easygates to chart their own growth path in the large and dynamic U.S. marketplace."
Historically easyhome and easygates split the royalties associated with the U.S. franchise network. Under the terms of the sale agreement, easygates has acquired from easyhome its rights to receive its share of those royalties. Going forward, easygates will continue to operate under the easyhome banner but will be able to more easily adapt to the changing U.S. market while growing and supporting its franchise network. easygates agreed to pay $4.9 million for easyhome's royalty rights and other considerations. easygates paid $0.5 million at closing with the balance to be paid subsequently according to an agreed upon schedule, including an additional $3.8 million to be paid within 60 days of closing.
"We are excited and optimistic about the opportunities in front of us to grow our network of franchise stores," commented Bud Gates, CEO of easygates. "Our intimate knowledge of the U.S. lease-to-own market will enable us to aggressively grow our network and to deepen support for existing franchisees which will result in even stronger performance. Also, the consolidation of all franchise support by our team will provide greater focus and efficiency. We look forward to building on the success of the business that both easyhome and easygates have created."
easyhome Ltd. is the Canadian leader in providing goods and financial services to the cash and credit constrained consumer. easyhome Ltd. serves its customers under the master brand goeasy through its two key operating divisions, easyhome Leasing and easyfinancial. easyhome Leasing is Canada's largest merchandise leasing Company, offering top quality, brand-name household furnishings, appliances and home electronic products to consumers under weekly or monthly leasing agreements through both corporate and franchise stores. easyfinancial is a leading provider of consumer loans as an alternative to traditional banks and payday lenders. easyhome Ltd. is listed on the TSX under the symbol 'EH'. For more information, visit www.easyhome.ca.
easygates LLC was established in 2007 by Bud Gates, the former Chairman and CEO of Rent-A-Center and THORN Americas, Inc. to develop and franchise easyhome stores in the $6 billon Unites States rent-to-own industry. The first U.S. franchise easyhome store opened in November, 2008 and the easyhome franchise business in the U.S. has grown to 50 stores across 15 states as of December 31, 2014. With the majority of the U.S. market still undeveloped regarding easyhome stores, easygates LLC plans on dynamic store growth over the next five years.
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