Sequential Brands Group (SBG) announced Monday that it closed to acquisition of the Joe’s Jeans brand. The company’s long-term license agreement for the brand’s core categories with Global Brands Group went into effect immediately.
SBG is increasing its forward looking twelve month royalty revenue projection to $98-$100 million and $61-$63 million of Adjusted EBITDA, from its previous projection of $88-$90 million in royalty revenue and $53.5 to $55 million of Adjusted EBITDA. The company anticipates that the financial impact to the balance of the current fiscal year will be immaterial as the new core license agreement is expected to have most of its impact in Fiscal 2016.
SBG has in excess of $325 million of aggregate contractual guaranteed minimum royalties under its existing licenses as of the close the Joe’s Jeans transaction. Included in this amount is over $63 million related to the Joe’s brand, representing 94 percent of the purchase price.
All projections and aggregate contractual minimum royalty metrics do not include the impact of the pending Martha Stewart Omni Living transaction, which the company is expected to close by year end.