Update: Sequential Closes Acquisition of Jessica Simpson Brand
Sequential Brands Group, Inc. announced today that it has closed the acquisition of the Jessica Simpson brand. The company said, in a statement, that it has acquired a majority interest in the brand, including the Jessica Simpson Collection master license and other rights.
Financing for the acquisition was provided by Bank of America and GSO Capital Partners LP, an affiliate of Blackstone Group, Sequential said in the release.
Sequential is projecting forward 12-month royalty revenues of $88 to $90 million and $53.5 to $55.0 million of adjusted EBITDA from its total brand portfolio.
As of the transaction’s close, Sequential said it has in excess of $250 million of aggregate contractual guaranteed minimum royalties under its existing licenses.
Sequential also upped its FY 2015 guidance, projecting revenue of between $78.0 and $81.0 million and increasing projected Adjusted EBITDA to between $48.5 and $50.5 million.
What We Reported Last Week
Sequential Brands Group Inc. has acquired a majority stake in the Jessica Simpson brand. As a part of the deal, Sequential acquired the master license to the line, though Camuto Group will continue to produce the collection’s footwear. Prior to the agreement, Camuto Group operated the master license. The deal is the first major business move Camuto Group has made since the death of founder Vince Camuto in January.
The deal is expected to close in the next 90 days and has been completed for an undisclosed amount of cash and stock. Designer Jessica Simpson will own the balance of equity in the brand and chose Sequential as her new partner. The footwear license will remain with Camuto Group under a new “long-term agreement” according to a release.
In 2005, Camuto teamed with Simpson to create a shoe line that has become one of the most influential and successful celebrity brands in the market. Last year, sales topped $1 billion, and Simpson now designs products in more than 30 categories.
“We are excited to work with Sequential and to continue working closely with Jessica and the Jessica Simpson brand. We have enjoyed many years of success with Jessica and we are committed and looking forward to many more years ahead,” said Camuto Group CEO Alex Del Cielo in a morning statement.
In a 2013 interview, Camuto credited Simpson’s success to her hands-on approach. “She has a keen insight into what her customers want: exceptional value. She is committed to developing a vision and [is involved in everything,] from selecting materials to determining the prints and styles that work best for a woman’s body.”
Sequential Brands also owns Heelys, Ellen Tracy and Justin Timberlake’s celebrity label, William Rast, among other brands. The company reported that it expects the deal to result in $88 to $90 million in revenue and $53.5 to $55 million adjusted EBITDA for the year.
In a March interview with Footwear News, new Camuto Group CEO Alex Del Cielo said he was on the lookout for opportunities for Camuto Group. “We are always open to strategic growth opportunities and partnerships as we continue to develop our current businesses at the same time,” he said.