Peterson Carves Out FranklinCovey Unit

Peterson Partners has agreed to acquire the Consumer Solutions business unit of FranklinCovey (FC), which makes personal planners and other organizational products. The deal is valued at $32 million in cash, while FranklinCovey will invest $1.7 million to retain a 19.5% voting interest in the new company.



FranklinCovey (NYSE: FC) today announced that it has entered into an agreement with Peterson Partners to create a new company, Franklin Covey Products, LLC. This new company will purchase substantially all of the assets of FranklinCovey's Consumer Solutions Business Unit (CSBU) and, pursuant to a comprehensive license agreement, will continue expanding CSBU's planner and other branded consumer products businesses through its proprietary channels and through third-party retailers worldwide. FranklinCovey will focus its full resources on the continued expansion of its training, consulting, content-rich media and thought leadership businesses, which currently operate in 147 countries.


The new company, which will be controlled by Peterson Partners, will purchase the CSBU assets for $32.0M in cash subject to adjustments for net working capital. FranklinCovey will invest $1.7M to purchase a 19.5% voting interest in the new company, will make a $1.0M interest bearing preferred capital contribution and will also have the opportunity to earn contingent license fees as the new company achieves certain performance objectives. FranklinCovey intends to utilize the sale proceeds to repurchase a substantial number of shares of its common stock pursuant to a Dutch auction tender offer, which it anticipates would commence shortly after the closing of the transaction.

Peterson Partners, a leading Intermountain West investment firm based in Salt Lake City, Utah, specializes in investing in small to mid-sized companies and has a track record of successful investments including JetBlue, Making Memories, EnergySolutions, 3form, Cranium, Asurion, Instashred, Winder Farms, MITY Enterprises and Diamond Rental. Founded in 1995, Peterson Partners has managed over $400 million in committed capital through five funds.

Sarah Merz, current President of the CSBU, will be named Chief Executive Officer of Franklin Covey Products, LLC and will serve on its board of managers. Robert A. Whitman, Chairman and Chief Executive Officer of FranklinCovey, has agreed to also serve as Chairman of the board of managers of Franklin Covey Products, LLC for a period of three years. Whitman will serve without compensation. The jobs and responsibilities of CSBU's other officers and employees are not expected to be affected by the transaction. Merz and her other senior officers will own significant equity interests in Franklin Covey Products, LLC.


The CSBU is primarily focused on sales of the Company's planners and other hard goods products to individual customers and small business organizations and includes the operations of the company's domestic retail stores, consumer direct channels, wholesale operations, international product channels and other related distribution channels, including government product sales and domestic printing and publishing operations. Some of the Company's best-known consumer products include the popular FranklinCovey Planning System