* Says deal is in partnership with Schulz family
* Iconix to fund its 80 pct share with existing cash
* Says deal to add $0.12-$0.15/shr to earnings annually
* Q1 adj EPS $0.36 vs est $0.31, rev up 42 pct
* Raises 2010 adj EPS view to $1.35-$1.40 vs est $1.29
(Recasts; updates with first-quarter results, analyst
By Shobhana Chadha
BANGALORE, April 27 Iconix Brand Group Inc
(ICON.O) said it will take over licensing of E.W. Scripps Co's
(SSP.N) syndicated comic strips as well as rights to the
Peanuts brand, in partnership with the family of cartoonist
The $175 million deal will see the acquirers forming a
joint venture to hold the assets, with the New York-based
fashion house holding 80 percent of the subsidiary and the
Schulz family holding the remainder.
Besides ownership of Peanuts, the JV will also hold
licensing rights to United Features Syndicate characters such
as Dilbert and Fancy Nancy.
"The deal may not necessarily transform Iconix but it will
certainly diversify the portfolio of the company," Lazard
Capital Markets analyst Todd Slater said.
Iconix, which will fund its share of the acquisition with
its existing cash balance, said the deal is expected to
generate about $75 million in royalty revenue and add 12 cents
to 15 cents a share to its earnings, annually.
The company had said last August it planned to spend $300
million to $600 million over 18 months on acquisitions.
Iconix owns and licenses brands including Candie's, Joe
Boxer and Badgley Mischka, to retailers like Target Corp
(TGT.N), Wal-Mart Stores Inc (WMT.N) and Kohl's Corp (KSS.N).
Separately on Tuesday, Iconix posted a first-quarter profit
ahead of Wall Street estimates, helped by its direct-to-retail
strategy and strong organic growth.
The company also raised its fiscal 2010 forecast, mainly to
account for the deal.
It now sees revenue in the range of $305 million to $315
million, a $45 million rise over both ends of its earlier
forecast range. The company expects to earn $1.35 to $1.40 a
share, up from its earlier forecast of $1.25 to $1.30.
Analysts on average were expecting earnings of $1.29 a
share, on revenue of $266.3 million, according to Thomson
OPENS NEW DOORS
The iconic Peanuts comic strip -- home to such beloved
characters as Snoopy and Charlie Brown -- was created by Schulz
in 1950, and has gone on to become one of the widely syndicated
comic strips in history.
The brand is licensed in over 40 countries and has annual
retail sales of over $2 billion. Schulz died in 2000 at the age
"We believe Peanuts large global footprint and broad
licensing relationships will also open up new doors for our
existing portfolio of brands and future acquisitions," Iconix
Chief Executive Neil Cole said in a statement.
However, Iconix said costs associated with the Peanuts
brand would be higher than its existing brands, because the
Schulz heirs will continue to earn money from an existing
revenue share agreement, separate from their ownership stake in
Iconix, whose recent deal saw it agree to launch fashion
brands with popstar Madonna, earned $24.8 million, or 33 cents
a share, in the first quarter, on revenue of $71.7 million.
Excluding items, the company earned 36 cents a share,
compared with analysts' expectations of 31 cents a share.
Iconix shares were trading up 2 percent at $18.80 on
Nasdaq, while Scripps was up 2 percent at $10.31 on the New
York Stock Exchange.
(Reporting by Sakthi Prasad and Shobhana Chadha in Bangalore;
Editing by Rupert Winchester, Anne Pallivathuckal, Anthony