Master franchisor Cartridge World has bought back its highly successful French and UK franchises for $30 million.
A Phillips Fox corporate team based in Adelaide, comprising partners Neil Kandelaars and Peter Buberis, and senior associates Naomi Kelly and Fiona Trethewey in Adelaide, acted for Cartridge World. Melbourne-based Phillips Fox consultant Greg Clayton was also involved.
Cartridge World, a printer cartridge refilling business, has its home in Adelaide, but in 1996 set up an international franchising system, advised by Phillips Fox. In a short time it had more than 1200 stores around the world.
The company was Franchisor of the Year in 2004, and is considered one of Australia’s great franchising success stories.
“I believe the transaction is unique,” said Buberis. “I’m not aware personally of any Australian international franchise that has done as well, and then said, ‘let’s bring it back into the family in Australia like this.’”
The UK franchise in particular had enjoyed notable success, with more than 300 stores across the country. “The assessment had been that it would be an excellent profit-making business moving forward,” said Buberis. “The acquisition is regarded as a positive and lucrative investment by the Australian franchisor.”
Although within the family, the acquisition was complex. The acquisition vehicle was a subsidiary of Cartridge World's wholly owned USA subsidiary which conducts some 400 stores in the United States. That subsidiary was based in Luxembourg to facilitate the European purchase. Completion of the acquisition was financed by DB Zwirn of New York, and the entire process involved 40 lawyers over five international jurisdictions.
Phillips Fox drew on the assistance of its newly acquired global partner DLA Piper and its offices in the UK, France and the US to accomplish the deal.
This was one of the first major deals on which the firm collaborated with its partner since the formal alliance was announced in May.
Bill Glover at Freehills advised US financier DB Zwirn, in respect of Australian securities.