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Authentic Brands Group to Acquire Nautica Brand From VF Corp.

Authentic Brands Group’s (ABG) cadre of managed brands expanded Monday, with the acquisition of the Nautica business from VF Corp.

ABG, owner of a global portfolio of entertainment and lifestyle brands, signed a definitive agreement to purchase Nautica from VF Corp., and said the transaction will mark a major milestone, completing its largest brand acquisition and propelling its portfolio to nearly $7 billion in global retail sales.

“Nautica has significant global presence and incredible consumer reach,” Jamie Salter, chairman and CEO of ABG, said. “Through this acquisition we come closer to our goal of achieving $10 billion in global retail sales worldwide by 2020.”

For VF’s part, company chairman, president and CEO, Steve Rendle, said, “As part of VF’s global business strategy, we’ve stated that our highest priority is to actively manage our brand portfolio to ensure that its composition positions us to accelerate growth. This announcement marks yet another example of how we’re delivering on our commitment…The Nautica brand is an iconic, globally recognized brand and Authentic Brands Group is the ideal owner to guide its next phase of growth and success.”

ABG will take on Nautica’s brand marketing and licensing functions as part of the transaction. Other parts of the operation will fall under the purview of Aero OpCo, the operating partner for Aéropostale. Aero OpCo will assume the role of Nautica’s core licensee and operating partner, managing the brand’s wholesale business, its more than 70 U.S. stores and e-commerce operations, plus product development and various other functions.

Nautica has long been recognized as a lifestyle brand rooted in Americana. The brand brings in more than $1.2 billion in annual retail sales, has upward of 5,000 global points of sale, including 270 freestanding stores, and more than 40 licensing partners around the world.

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ABG said the purchase of Nautica helps give impetus to its global growth strategy, which consists of expanding in key markets and opening full-service offices. ABG Shanghai is set to break ground this month with other locations set to open in London, Mexico City and Los Angeles in 2018.

The transaction, which is expected to close in the first half of the year, will be subject to standard closing conditions and regulatory approvals.

Terms of the agreement were not disclosed, but BofA Merrill Lynch served as exclusive financial advisor to VF on the transaction, and Davis Polk & Wardwell LLP is acting as legal advisor.

ABG is a brand development, marketing and entertainment company headquartered in New York City. It manages more than 30 consumer brands by partnering with manufacturers, wholesalers and retailers. Its celebrity brands include Marilyn Monroe, Elvis Presley, Muhammad Ali, Shaquille O’Neal, Dr. J, Greg Norman, Neil Lane, Thalia and Michael Jackson.

ABG also manages Aéropostale, Juicy Couture, Jones New York, Herve Leger, Judith Leiber, Frederick’s of Hollywood, Frye, Adrienne Vittadini, Taryn Rose, Misook, Hickey Freeman, Hart Schaffner Marx, Spyder, Tretorn, Tapout, Prince, Airwalk, Vision Street Wear, Above The Rim, and Hind.

VF, which owns such major like Wrangler, Lee, Vans, The North Face and Timberland, has been reshaping its cadre of labels, recently purchasing the Altra active footwear brand, the Icebreaker natural fiber performance apparel line and the Williamson-Dickie workwear brand. Last April, VF sold its Licensed Sports Group, including the Majestic brand, to Fanatics Inc.

The company’s revenue increased 7 percent to $11.8 billion in fiscal 2017, while it reported an after-tax net loss from discontinued operations of $106 million, which included a loss on the sale of the licensing business, noncash impairment charges related to the discontinuance of the Nautica operation, and the operating results of the licensing and Nautica brand businesses.