As a result of the transaction, Iconix Brands, which owns a number of well-known brands, will change its structure and pay off all debts.
Iconix Brand announced that it has entered the process of a sale, with investment firm Lancer Capital as the buyer. The amount of the agreement, which is scheduled to be completed by the end of the third quarter of 2021, will be $585 million, including net debt.
As a result of the Iconix deal, which owns brands such as Umbro, starter, Ed Hardy, Mossimo, London Fog and many others will become a privately held company. At the same time, under the terms of the agreement, Lancer will contribute $60 million to the company's capital stock. It was also announced that a specially created division of Lancer called Iconix Acquisition Corp will launch a tender offer to acquire all outstanding shares of Iconix at $3.15 per share in cash.
According to the company, it was decided to take such a step after a whole year of discussions of strategic alternatives. Iconix, which owns many brands, has felt the impact of the crisis in retail. The flow of buyers and income even before the pandemic has been steadily declining for most fashion brands, and the events of the past year have only exacerbated the situation. Aggravating the situation in the market and the difficult situation in the field of shopping centers, which such brand aggregators often rely on.
For Iconix, which has about $518.2 million in long-term debt, the drop in first-quarter sales was an important factor in its decision to sell. Also of no small importance was the fact that in recent years a number of important partners have refused to cooperate with Iconix, including target и walmartwho prefer to develop their own brands in a modern environment.