Franchise Group Inc. plans to issue new debt to fund the acquisition of Pet Supplies Plus and refinance its existing debt. We are affirming our 'B+' issuer credit rating on Franchise Group Inc., reflecting our expectation for continued EBITDA expansion following the acquisition. At the same time, we are assigning a 'BB' issue-level rating and a '1' recovery rating to the company's proposed first out term loan, a 'B-' issue-level rating and '6' recovery rating to the proposed last out term loan, and a 'B-' issue-level rating and a '6' recovery rating to the proposed unsecured debt. The stable outlook reflects our expectation for improving EBITDA and cash flow generation as the company benefits from cost synergies from its recent
