H&R Block Buys Southwest Franchise for $278 Million

H&R Block Buys Southwest Franchise For $278 Million
Wednesday, September 03, 2008; Posted: 03:04 PM

September 3, 2008 (FinancialWire) -- H&R Block (NYSE: HRB Quote Chart News PowerRating) (Current Market Cap: US$8.46 Bil.) has signed a definitive agreement to acquire the operator of its franchise units in Texas, Oklahoma and Arkansas for around $278 million in cash.

The franchisees, H&R Block Houston and a group of related companies served around 760,000 clients and posted system-wide revenues of more than $140 million in fiscal year 2008.

H&R Block said that, because of the age of the Block Texas franchise agreement, it included an unusually low royalty blended rate of 6% on revenues, compared with a contractual rate of 30% on new franchise agreements.


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