B. Riley Financial established a receivables business to provide debt monetization solutions and portfolio acquisition services for its clients. This new division will utilize the company’s capital base and the resources offered through its affiliates with a goal of preserving and maximizing value for clients, including through valuation services, restructuring and turnaround management, distressed debt and financial structuring. As of Sept. 30, B. Riley Financial had in excess of $5 billion in total assets.
In connection with the formation of this new division, B. Riley Financial also purchased a portfolio of performing credit receivables from W.S. Badcock , a home furnishings company and subsidiary of Franchise Group. Under the terms of the transaction, a B. Riley Financial entity acquired the W.S. Badcock credit receivables portfolio for an aggregate purchase price of approximately $400 million. Badcock will continue to service and administer the purchased receivables, which totaled approximately $535 million as of Dec. 15. B. Riley intends to purchase additional receivables, subject to certain limitations and restrictions.
“We expect this purchase to be accretive to our EBITDA and to provide additional cash flow for B. Riley Financial throughout the portfolio’s lifecycle,” Bryant Riley, chairman and co-CEO of B. Riley Financial, said. “This transaction is also a continuation of our commitment to enable FRG’s success as a leading operator in the franchising sector. Utilizing our balance sheet to support our clients has been a proven driver of our ability to deliver for our shareholders. We intend to continue to pursue acquisitions and strategic investments with attractive risk-adjusted returns as a core part of our platform strategy.”
Several B. Riley Financial affiliates provided financial advisory services to support the closing of the W.S. Badcock receivables transaction. Choate Hall & Stewart served as legal counsel and Hudson Cook served as regulatory counsel to B. Riley Financial. Willkie Farr & Gallagher served as legal counsel to Franchise Group.
