One down, three to go.
Bankrupt Sequential Brands is closing in on a $330 million deal to sell its active brands group, including the And1 and Avia footwear brands as well as Gaiam and SPRI, to Tony Hawk brand owner Galaxy Universal. Expected to close in mid-November, the transaction is still subject to bankruptcy court approval.
“In this ever changing marketplace, we are strategically positioned to deliver on the customers’ constantly evolving expectations. Galaxy is able to provide great brands, unique designs and upgraded quality at exceptional values,” said Galaxy CEO Eddie Esses, a footwear and brand management industry veteran.
Sequential brands including Joe’s Jeans, William Rast and Jessica Simpson are still awaiting their fate.
Galaxy has been active this year in building out its vertical platform. This spring, the company acquired Apex Global Brands and its portfolio including Hi-Tec and Magnum. Galaxy also owns Cherokee and Interceptor and has licensing agreements with Justice, London Fog and more.
Galaxy is part of the Gainline Capital Partners portfolio. “The rich heritage of these brands combined with the passion, experience and unrivaled track record of Mr. Esses and his team distinguishes this investment. We are thrilled to support this team and advance the Galaxy partnership as the company expands and future acquisition opportunities present themselves,” Allan Weinstein, Gainline’s managing partner, said.
KKR led the debt financing for the acquisition, and will become a co-investor. “Galaxy’s vertical integration strategy and strong specialization in active products positions [our] company to take these great brands to new heights,” said Lauren Krueger, KKR’s managing director.
The two firms had inked a stalking horse agreement earlier as part of Sequential’s Chapter 11 bankruptcy ahead of a possible court auction. An auction slated for Friday was called off.
The brand management firm had been struggling for some time under a heavy debt load and was probed by the Securities and Exchange Commission over accounting irregularities.