M&A Action: Sequential Brands, Proenza Schouler

Jessica Simpson Spring Campaign
Jessica Simpson wearing short-shorts and fringed suede heels in an image from her spring '15 campaign.
Courtesy of brand

In the latest footwear and apparel dealmaking, Sequential Brands Group Inc. and New York-based womenswear-and-accessories brand Proenza Schouler have both made power moves.

Sequential Brands — hot off its highly publicized Jessica Simpson brand acquisition — snapped up Martha Stewart Living Omnimedia Inc. (MSLO). Meanwhile, according to WWD, Proenza Schouler has taken on private equity firm Castanea Partners as a minority investor.

In Sequential’s Martha Stewart deal, valued at $6.15 per share and payable 50 percent in stock and 50 percent in cash, Martha Stewart will  continue to serve as the chief creative officer of the brand she founded.

While announcing the merger June 22, Sequential also said that Stewart will become a “significant stockholder” of the new public holding company of Sequential and MSLO and will be nominated to serve on its board of directors as of the deal’s closing.

MSLO reaches approximately 100 million consumers across several media platforms each month, the firm said in a release, and has a retail presence in thousands of locations including Macy’s, Home Depot, PetSmart, Michaels and Staples. The merger also brings the Emeril Lagasse brand, including its food and cookware lines, television and book-publishing properties, as well as its founder, Lagasse, into the Sequential portfolio.

The acquisition is expected to close in the second half of 2015.

Meanwhile, Proenza Schouler, founded by designers Jack McCollough and Lazaro Hernandez in 2002, has been the subject of expansion talk since announcing its entrance into the fragrance category via a licensing agreement for the creation and development of fine fragrances with L’Oréal in March.

Now the firm, according to WWD, has secured minority investment from Newton, Mass.-based private equity firm, Castanea Partners. While the terms of the deal have not been disclosed, Castanea typically invests $15 million to $75 million of equity capital in its deals, according to its website.

Shirley Cook, Proenza Schouler’s CEO since 2002, is leaving the company as part of the transaction and will be replaced on an interim basis by former Saks Fifth Avenue President Ron Frasch, WWD reports.