Galaxy Universal, LLC. has agreed to acquire the And1, Avia, Gaiam, and SPRI brands as part of the bankruptcy proceedings of Sequential Brands Group, Inc. for approximately $330 million.
The transaction is subject to the satisfaction or waiver of customary closing conditions, including court approval, and is expected to close by mid-November 2021.
On August 31, Sequential Brands Group announced that it had started voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware, with a plan to divest its portfolio of brands or to sell the company.
As part of the filling, Sequential Brands agreed to sell its active division brands, including Gaiam, Avia, SPRI, and And1, to Galaxy Universal for $333 million. Galaxy will serve as a stalking horse bidder to explore higher bids for the active segment as part of Sequential Brands’ bankruptcy filing.
An auction scheduled for last Friday was canceled when no other qualified bids materialized.
Other brands owned by Sequential include Jessica Simpson, William Rast, Joe’s Jeans, and The Franklin Mint.
Galaxy Universal, a portfolio company of Gainline Capital Partners, said the transaction is a continuation of its strategy to vertically integrate strong brands under one management operation that controls marketing, design, sales, sourcing, and manufacturing.
Galaxy is led by CEO Eddie Esses, a footwear and brand management industry veteran. “In this everchanging marketplace, we are strategically positioned to deliver on the customer’s constantly evolving expectations. Galaxy is able to provide great brands, unique designs and upgraded quality at exceptional values,” Esses said.
This spring, Galaxy completed the acquisition of Apex Global Brands, including, Hi-Tec, Magnum and Tony Hawk. It also has licensing deals with brands, including Justice, London Fog and others.
Allan Weinstein, managing partner, Gainline, said, “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.”
KKR led the debt financing for the acquisition and will participate as a co-investor.
“Galaxy’s vertical integration strategy and specialization in active products position the company to take these great brands to new heights,” said Lauren Krueger, managing director, KKR. “We are excited to finance the deal and invest in the future of the company as a strategic partner with the Galaxy and Gainline teams.”
KKR is making its investment in Galaxy through certain private credit managed accounts.
Houlihan Lokey Inc acted as exclusive financial advisor and Willkie Farr & Gallagher LLP acted as legal advisors to Galaxy Universal LLC. Credit Suisse Securities (USA) LLC acted as an exclusive placement agent to Gainline Capital Partners. Province acted as financial advisor and King & Spalding LLP acted as legal advisor to KKR. Stifel and its affiliate Miller Buckfire acted as financial advisors and Gibson, Dunn & Crutcher LLP were legal advisors to Sequential Brands.
Photo courtesy Gaiam
