Iconix Brand Group, Inc. Announces Definitive Agreement to Acquire a 51%
Controlling Interest in Ecko Brands
NEW YORK, Oct. 27 /PRNewswire-FirstCall/ -- Iconix Brand Group, Inc. (Nasdaq:
ICON) ("Iconix" or the "Company"), today announced that it has signed a
definitive agreement to acquire a controlling interest in the Ecko portfolio
of brands, which represents over $1 billion of annual global retail sales. The
Ecko portfolio includes Ecko Unlimited, Marc Ecko, the Rhino logo and Zoo
York. Iconix will form a joint venture company with an affiliate of the
Sellers to acquire the trademarks. Iconix will have a 51% interest in the
joint venture and will control the licensing company and consolidate its
results. Marc Ecko will continue in his capacity as the Chief Creative Officer
of the company as he has since its inception.
Neil Cole, Chairman and CEO of Iconix Brand Group, Inc. commented, "This
purchase is consistent with our strategy to opportunistically acquire leading
consumer brands that offer long-term growth potential when integrated into our
business model. Marc and Seth have built powerful lifestyle brands and we look
forward to working with them to continue to build these businesses on a global
basis. The Ecko portfolio is a collection of powerful lifestyle brands some of
which we believe could lend themselves easily to our direct retail model. In
addition, Ecko already has strong licensing partners and a robust European
platform, from which we could leverage the rest of our portfolio. Iconix and
our shareholders will benefit from this accretive transaction as we are
acquiring a strong portfolio of consumer brands at an attractive multiple."
Seth Gerszberg, commented, "I have always admired Iconix's brand stewardship
and dynamic development of licensing opportunities. As we enter our next
stage of growth and development, Marc and I are excited to benefit from Neil's
market intuition and experience."
Marc Ecko, commented, "I am excited for the opportunity to partner with Iconix
and have them join Seth and me on continuing this amazing journey. Ever since
I have started, people have tried to marginalize streetwear as a niche
business. After 15 years of consistent global retail growth and product
expansion, I am excited at taking this next step. This partnership is a great
fit for us. Iconix gets our passion for our brand and will support us to
realize our vision for the future. This new venture provides me the bandwidth
for my brand and allows me the resources and freedom to extend my professional
and creative ambitions beyond my current platform of fashion, video gaming and
publishing. "
For this acquisition, Iconix will pay $63.5 million of its cash, and the joint
venture, of which Iconix will own 51%, will obtain $90 million of financing at
an annual interest rate of approximately 7.5%, which is non-recourse to
Iconix. Therefore, Iconix's effective purchase price for this acquisition will
be $109 million. On a pro-forma basis for 2010, the Company expects the joint
venture to generate approximately $42 - $44 million in annual net royalty
revenue. Based on a pre-defined revenue and profit sharing calculation in the
agreement the Iconix share of the gross royalties from the joint venture will
be approximately $26 million. Iconix will control the licensing business and
will therefore consolidate 100% of the results of this joint venture with
minority interest being deducted below the operating income line, and only the
earnings attributable to Iconix will be included in EBITDA.
Iconix Brand Group Inc. (Nasdaq: ICON) owns, licenses and markets a growing
portfolio of consumer brands including CANDIE'S (R), BONGO (R), BADGLEY
MISCHKA (R), JOE BOXER (R) RAMPAGE (R) MUDD (R), LONDON FOG (R), MOSSIMO (R)
OCEAN PACIFIC (R), DANSKIN (R) ROCA WEAR(R), CANNON (R), ROYAL VELVET (R),
FIELDCREST (R), CHARISMA (R), STARTER (R) and WAVERLY (R). In addition, Iconix
owns an interest in the ARTFUL DODGER (R) and ED HARDY (R) brands. The Company
licenses its brands to a network of leading retailers and manufacturers that
touch every major segment of retail distribution from the luxury market to the
mass market in both the U.S. and around the world. Iconix, through its
in-house advertising, promotion and public relations agency, markets its
brands to continually drive greater consumer awareness and equity.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995. The statements that are not historical facts contained in this press
release are forward looking statements that involve a number of known and
unknown risks, uncertainties and other factors, all of which are difficult or
impossible to predict and many of which are beyond the control of the Company,
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or
achievements expressed or implied by such forward looking statements. Such
factors include, but are not limited to, uncertainty regarding the results of
the Company's acquisition of additional licenses, continued market acceptance
of current products and the ability to successfully develop and market new
products particularly in light of rapidly changing fashion trends, the impact
of supply and manufacturing constraints or difficulties relating to the
Company's licensees' dependence on foreign manufacturers and suppliers,
uncertainties relating to customer plans and commitments, the ability of
licensees to successfully market and sell branded products, competition,
uncertainties relating to economic conditions in the markets in which the
Company operates, the ability to hire and retain key personnel, the ability to
obtain capital if required, the risks of litigation and regulatory
proceedings, the risks of uncertainty of trademark protection, the uncertainty
of marketing and licensing acquired trademarks and other risks detailed in the
Company's SEC filings, including the prospectus supplement relating to the
offering. The words "believe", "anticipate," "expect", "confident", "will",
"project", "provide" "guidance" and similar expressions identify
forward-looking statements. Readers are cautioned not to place undue reliance
on these forward looking statements, which speak only as of the date the
statement was made. All forward-looking statements are qualified by these
cautionary statements and apply only as of the date they are made. The Company
undertakes no obligation to update any forward-looking statement, whether as a
result of new information, future events or otherwise.
Contact Information:
Jaime Sheinheit
Investor Relations
Iconix Brand Group
212.730.0030
Tara Levy
Public Relations
Iconix Brand Group
212.730.0030
SOURCE Iconix Brand Group, Inc.
Jaime Sheinheit, Investor Relations, or Tara Levy, Public Relations, both of
Iconix Brand Group, +1-212-730-0030
