Apex Global Brands Inc. said it entered into a merger agreement with Galaxy Universal LLC. Apex’s brands include Hi-Tec, Magnum, 50 Peaks, Interceptor, Cherokee, Tony Hawk, Point Cove, Carole Little Everyday California, and Sideout.

The closing of the acquisition is expected to occur in the second quarter of 2021.

“After conducting an extensive analysis of our strategic alternatives with our financial advisor, the Board of Directors concluded that our sale to Galaxy Universal LLC is the best path to deliver equity to our shareholders,” said Henry Stupp, Chief Executive Officer of Apex Global Brands. “We believe that the sale process will be seamless for our licensees and that there will be no disruption to our operations.”

Under the terms of the agreement, which has been unanimously approved by the members of the Apex Board of Directors, Galaxy Universal LLC will acquire all of the outstanding shares of Apex for $2.00 per share in cash. Apex has 564,000 shares outstanding.

A special meeting of Apex Global Brands Inc. stockholders will be held as soon as practicable following the filing of a definitive proxy statement with the U.S Securities and Exchange Commission and subsequent mailing to stockholders. The Company’s officers, directors and certain stockholders collectively holding approximately 30 percent of the outstanding shares of Apex have entered into voting agreements committing them to, among other things, vote in favor of adopting the merger agreement. The proposed transaction is subject to approval by Apex stockholders, along with the satisfaction of other customary closing conditions. Upon completion of the merger, Apex will become wholly owned by Galaxy Universal LLC.

Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, P.C. is serving as legal advisor and Houlihan Lokey is serving as financial advisor to Apex Global Brands Inc., while Willkie Farr & Gallagher LLP is serving as legal advisor to Galaxy Universal LLC.

Forbearance Extension
In conjunction with the merger agreement, Apex entered into a Seventh Amendment to its Financing Agreement and Forbearance Agreement with its senior secured lenders. This amendment extends the senior secured lender’s forbearance through the earlier of June 30, 2021, or the termination or closure of the merger.

Apex Global Brands Inc. Stockholder Vote
Apex intends to hold a special meeting of its stockholders to consider and vote on a proposal to adopt the merger agreement. Apex’s stockholders of record will be entitled to receive notice of, and to vote at, the special meeting and any adjournments or postponements thereof.

Photo courtesy Hi-Tec