Sequential Brands Group, Inc. closed its acquisition of the Gaiam yoga brand from Gaiam, Inc. for approximately $146 million in cash.
In the transaction, Sequential acquired Gaiam’s yoga, fitness and wellness product business – which includes the Gaiam and Spri brands. This bolt-on acquisition will be added to Sequential’s Active Division, which includes the And1 and Avia brands.
“We are pleased that the acquisition closed on schedule and we’re excited to further tap into the growing athletic market with one of the leading yoga lifestyle brands,” said Yehuda Shmidman, CEO of Sequential.
With a 20+ year heritage, Gaiam is dedicated to making yoga, fitness and wellness accessible to all through a wide distribution network that consists of approximately 38,000 retail doors, 19,000 store within stores, 5,000 category management locations, e-commerce, and a mobile platform which features Yoga Studio, the leading paid yoga app for Apple, mobile, and tablet devices with over 1 million downloads to date.
Financial Update:
As a result of the acquisition, the Company previously increased its twelve-month run rate projection from $150 – $155 million of revenue to $172 – $177 million of revenue and from $92.5 – $95.0 million of Adjusted EBITDA to $112 – $115 million of Adjusted EBITDA. This run rate projection is anticipated after the completion of the integration of the Martha Stewart business.
For full-year 2016, the Company is increasing its projection from $145 -$150 million of revenue to $155 – $160 million of revenue and from $83 – $87 million of Adjusted EBITDA to $88 – $91 million of Adjusted EBITDA.
In connection with the acquisition, the Company refinanced its existing credit facilities with Bank of America Merrill Lynch and GSO Capital Partners, LP, an affiliate of Blackstone Group. The Company currently has approximately $650 million of net debt. Additionally, the Company has in excess of $500 million of aggregate contractual guaranteed minimum royalties under its license agreements.
White & Case LLP and Gibson, Dunn & Crutcher LLP acted as legal counsel to the Company.
Sequential Brands Group, Inc. (SQBG) owns, promotes, markets, and licenses a portfolio of consumer brands in the fashion, home, active, and lifestyle categories. Sequential seeks to ensure that its brands continue to thrive and grow by employing strong brand management, design and marketing teams. Sequential has licensed and intends to license its brands in a variety of consumer categories to retailers, wholesalers and distributors in the United States and around the world.
