SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 17, 1998
FRANCHISE FINANCE CORPORATION OF AMERICA
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-13116 86-0736091
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
17207 North Perimeter Drive, Scottsdale, AZ 85255
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (602) 585-4500
NONE
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(Former Name or Former Address, if Change Since Last Report)
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Item 5. Other Events.
On February 17, 1998, the Registrant issued a press release in which it
announced that it has signed a purchase agreement (the "Agreement") pursuant to
which an affiliate of Colony Capital, Inc. ("Colony"), will acquire $100 million
of the Registrant's common stock in a private placement which is expected to
close within the next 45 days. In the transaction, Colony will acquire
approximately 8% of the Registrant's outstanding common stock and will have
warrants to purchase an additional 3%. In addition, Colony will appoint Kelvin
Davis, Colony's President and Chief Operating Officer, to be nominated to the
Board of Directors of the Registrant.
Colony will purchase the shares at a price of $26.37 per share,
representing 97% of the average closing price of the Registrant's shares over a
45-day trading period prior to the date of the Agreement. The strike price of
the warrants is 20% above Colony's purchase price.
The press release is filed as Exhibit 99.01 hereto.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.01 Press release dated February 17, 1998, issued by Franchise
Finance Corporation of America (the "Registrant"), announcing
the signing of the purchase agreement pursuant to which an
affiliate of Colony Capital, Inc. will acquire $100 million of
the Registrant's common stock in a private offering.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FRANCHISE FINANCE CORPORATION OF
AMERICA (Registrant)
Dated: February 17, 1998 By /s/ John Barravecchia
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John Barraveccia, Executive Vice President
and Chief Financial Officer
Dated: February 17, 1998 By /s/ Catherine F. Long
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Catherine F. Long, Senior Vice President,
Finance and Principal Accounting Officer
FRANCHISE FINANCE FFCA
CORPORATION OF AMERICA
press release Contact: Chris Volk, COO
FFCA
(602) 585-4500
Owen Blicksilver/Doug Donsky
Colony Capital, Inc.
(212) 303-7603/(212) 303-7608
FOR IMMEDIATE RELEASE
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Franchise Finance Corporation of America
Sells Stake to Colony Capital
Colony Affiliate to Invest $100 Million
for 8% Stake in Leading Restaurant Finance REIT
SCOTTSDALE, AZ, February 17, 1998... Franchise Finance Corporation of America
("FFCA") (NYSE:FFA), a self-administered real estate investment trust, today
announced that it has signed a purchase agreement pursuant to which an affiliate
of Colony Capital, Inc. ("Colony"), a Los Angeles based real estate-related
investment firm, will make a $100 million investment in the company's common
stock.
In the transaction, Colony will make the equity investment in newly-issued
shares of FFCA stock, representing approximately an 8% stake in the company. In
addition, Colony will have warrants to purchase an additional 3% of the company
and will appoint Kelvin Davis, Colony's President and Chief Operating Officer,
to be nominated to the company's Board of Directors. The equity issue, which is
subject to customary conditions and is expected to close in the next 45 days,
will make Colony the largest shareholder of FFCA.
The unregistered common stock of FFCA will be sold to Colony at a price of
$26.37 per share, representing 97% of the average closing price of FFCA shares
over a 45 day trading period prior to the date of the agreement. The strike
price of the warrants is 20% above Colony's purchase price. The new equity
issued by FFCA will provide the company with additional capital for growth of
its core businesses, while allowing the company to tap Colony's real estate and
capital markets expertise.
"FFCA is delighted to welcome Colony Capital as an investor and strategic
partner in our company," said Morton H. Fleischer, Chairman, President and Chief
Executive Officer of FFCA. "Colony's investment experience and financial
sophistication will be invaluable as our company grows. With this important
investment we have added to our financial flexibility and capabilities."
(MORE ...)
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February 17, 1998
FFCA
Page 2 of 2
17207 NORTH PERIMETER DRIVE
SCOTTSDALE, ARIZONA 85255-5402
602 585-4500 FAX 602 585-2726
hhtp://www.ffca.com
"We have been extremely impressed with FFCA's real estate and restaurant
industry knowledge," said Kelvin Davis. "We have great confidence in the ability
of FFCA's management team to continue to grow its strong core businesses, while
exploring other opportunities presented by the challenges facing the restaurant
industry."
Colony is a private, international real estate investment firm headquartered in
Los Angeles, with additional offices in New York, Texas, Florida, Hawaii and
Paris, France.
FFCA is a premier specialty retail finance company dedicated primarily to
providing financing to the chain restaurant industry, as well as the convenience
store and automotive parts and services industries. FFCA's mission is to be a
one-stop financing source for multi-unit chain store operators and franchisors
who own or operate the retail properties in which FFCA invests. Mortgage loans,
leasing alternatives, equipment loans and construction and acquisition financing
are among some of the financing solutions FFCA provides its customers. As of
December 31, 1997, FFCA and its affiliates had investments in approximately
2,500 properties in 47 states (including interests in securitized loans).
Restaurant chains represented within FFCA's portfolio include Applebee's,
Arby's, Burger King, Hardee's, Jack in the Box, KFC, Taco Bell and Wendy's.
The forward looking statements in this release concerning financing, development
and future results are subject to certain risks and uncertainties that could
cause actual results to differ materially from expectations. These and other
risks are set forth in FFCA's reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.
www.ffca.com
