NEW YORK, March 29, 2013 (GLOBE NEWSWIRE) -- Sequential Brands Group, Inc. (OTC:SQBG) ("Sequential" or the "Company") today announced that it acquired the intellectual property management company that owns two consumer lifestyle brands, Ellen Tracy and Caribbean Joe. The purchase price of the transaction was comprised of $62.3 million in cash and approximately 2.8 million shares of common stock of Sequential. Yehuda Shmidman, CEO of Sequential, commented, "Today's acquisition represents the completion of Sequential's base platform, as we acquired two strong brands and a proven activation team led by Rick Platt, who joins Sequential as Group President, Brand Management." Mr. Shmidman continued, "With the addition of both Ellen Tracy and Caribbean Joe, Sequential's portfolio now includes six brands that have more than 50 licensees and an expected run-rate of close to $1 billion in retail sales worldwide. With our brand management platform in place, our plan is to focus on growing each brand in our portfolio, while aggressively pursuing new brands as well." Ellen Tracy was founded in 1949, and over the years, the brand grew into a leading fashion brand distributed in premium department and specialty stores. The evolution of the brand continued in 2010, when, Macy's became the exclusive sportswear retailer for Ellen Tracy and the brand began launching internationally, most recently in Karstadt Germany. In addition to its successful apparel collections, Ellen Tracy expanded to include collections for footwear, outerwear, legwear, hosiery, belts, eyewear, fragrance, handbags, jewelry and home. Caribbean Joe is an island inspired lifestyle brand distributed in more than 10,000 retail locations with product categories that range from men's and women's apparel to swimwear and accessories. Both Ellen Tracy and Caribbean Joe are currently licensed to leading licensees including Li & Fung, Komar, The Moret Group, Bernette Textile and G-III Apparel Group. The Company estimates that these two brands together will generate between $12 and $14 million in royalty revenues in the next 12 months. On a combined basis with the Company's existing brand portfolio, the Company is projecting forward 12-month royalty revenues of $23-25 million from its six brands, operating at 50% EBITDA margin. The Company's EBITDA margin is expected to expand as the Company leverages the platform to acquire additional brands. After giving effect to the consummation of the acquisition, the related financing transactions and payment of related transaction costs and expenses, the Company will have approximately $15 million of cash on its balance sheet. In addition, the Company's six brands have approximately $80 million in aggregate minimum royalty revenue contractually guaranteed to the Company.
The Company's financing efforts were led by Bank of America who provided a $45 million loan to the Company and a separate group who provided an additional $20 million loan to the Company.About Sequential Brands Group, Inc. Sequential Brands Group, Inc. (OTC:SQBG) owns, promotes, markets, and licenses a portfolio of consumer brands that presently include William Rast®, People's Liberation®, DVS® Action Sports, Heelys®, Caribbean Joe® and Ellen Tracy®. Sequential seeks to ensure that its brands continue to thrive and grow by employing strong brand management, design and marketing teams. Sequential has licensed and intends to license its brands in a variety of consumer categories to retailers, wholesalers and distributors in the United States and in certain international territories. For more information, please visit Sequential's corporate website at: www.sequentialbrandsgroup.com . To inquire about licensing opportunities, please email: firstname.lastname@example.org. Forward-Looking Statements Certain statements in this press release and oral statements made from time to time by representatives of the Company are forward-looking statements ("forward-looking statements") that involve risks and uncertainties. For this purpose, any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. When used in this press release and in documents referenced herein, forward-looking statements include, without limitation, statements regarding our expectations, beliefs or intentions that are signified by terminology such as "subject to," "believes," "anticipates," "plans," "expects," "intends," "estimates," "may," "will," "should," "can," the negatives thereof, variations thereon and similar expressions. Such forward-looking statements reflect the Company's current views with respect to future events, based on what the Company believes are reasonable assumptions; however, such statements are subject to certain risks, uncertainties and other factors. Our actual results may differ materially from those anticipated in any forward-looking statements due to known and unknown risks, uncertainties and other factors. The section entitled "Risk Factors" set forth in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2011, in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 3012 and in similar discussions in our other Securities and Exchange Commission filings, discuss some of the important risks, uncertainties and other factors that may affect our business, results of operations and financial condition. The Company's stockholders are urged to consider such risks, uncertainties and factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. The Company is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT: Sequential Brands Group, Inc. Gary Klein, Chief Financial Officer 646-564-2577 email@example.com ICR Rachel Schacter/John Rouleau 203-682-8300 Rachel.firstname.lastname@example.org