NEW YORK (The Deal) -- Sequential Brands Group (SQBG) is paying a rich multiple to acquire Martha Stewart Living Omnimedia (MSO) for about $300 million in a transaction announced on Monday.
The multiple works outs to be about 23 times the nearly $13 million of adjusted earnings before interest, taxes, depreciation and amortization that the company is projected to generate for the fiscal year ending Dec. 31, according to data provided by Bloomberg.
The target has been shopped to for the past year or so, and all of the major players -- including heavyweights Authentic Brands Group and Iconix Brand Group (ICON) -- have taken a look, this person said.
The deal with Sequential Brands Group provides for a 30-day "go-shop" period in which Martha Stewart Living Omnimedia could seek out a better offer.
And the source wouldn't completely rule out a rival bid.
There is always a chance that one of the smaller players in the marketing and branding space hasn't had the opportunity to do due diligence. Authentic Brands Group or Iconix Brand Group could take a second look.
The multiple for Martha Stewart Living Omnimedia, once the entire business in converted to a pure royalty stream by its new parent Sequential Brands Group, may also look more similar to what historically has been paid, the source said.
The company, for example, still produced some of its own goods and held inventory, the source noted.