The owner of Rocawear, Candie’s, Joe Boxer and Danskin is set to go private.
Iconix Brand Group inked a deal to be acquired by an affiliate of private equity firm Lancer Capital in an all cash deal, including net debt, that values the grandfather of brand management firms at $585 million. According to its website, Lancer’s portfolio includes just one other company: IMS Correctional Healthcare, which provides health services to county and municipal jails.
“After a thorough and deliberative examination of all potential strategic alternatives, the board of directors determined that the transaction with Lancer provides the best value for our stockholders,” said Bob Galvin, CEO of Iconix, which also owns the IP of fashion and home brands including Bongo, Rampage, Mudd, Lee Cooper, London Fog, Starter, Umbro, Cannon, Royal Velvet, Fieldcrest and Waverly. “We expect that Iconix will continue developing its brands and supporting its partners as a private company.”
Iconix got its start after acquiring Candies in 1993, transitioning the footwear firm to a brand management and licensing model and later bringing this formula to a spate of fashion labels.
Trouble cropped up when founder Neil Cole and other executives resigned in 2015 in the wake of a Securities and Exchange Commission accounting probe. In December of 2019, Cole was indicted on charges that he engaged in a scheme to fraudulently inflate Iconix’s revenue and earnings per share and obstruct justice. Though he has pled “not guilty,” court records show his criminal case before Manhattan Federal District Court Judge Edgardo Ramos is still pending.
Two other senior executives were also charged and eventually settled with the SEC. Iconix was also charged with fraud, but without admitting or denying the allegations, agreed to pay a $5.5 million penalty to settle all claims.
Brand management rival Sequential, the owner of Jessica Simpson’s eponymous empire, has faced its own spate of troubles, and bankruptcy questions have intensified in recent weeks.
The Lancer transaction is subject to standard conditions and is expected to close before the end of the third quarter. Iconix said the offer price per share of $3.15 represents a 28.6 percent premium over its closing share price on June 10, and 46.5 percent over the 30-day average for the period ended June 10.
Iconix said its board unanimously approved the transaction and recommended that stockholders tender their shares when Lancer Capital begins its tender offer.