Iconix Brand Group, Inc. has entered into a definitive agreement to purchase Official Pillowtex, LLC, a licensing company that owns a large portfolio of home brands including four primary brands, Cannon, Royal Velvet, Fieldcrest and Charisma and numerous others home brands including St. Mary's and Santa Cruz. The purchase price will be $231 million in cash with contingent payments of up to an additional $15 million in cash based upon the brands surpassing specific revenue targets.

The four primary brands are all currently licensed in the U.S.: Cannon and Royal Velvet to Li & Fung USA, Fieldcrest to Target Stores and Charisma to Westpoint Stevens. In the aggregate the four brands are estimated to generate between $35 and $37 million in 2008 royalty revenue with direct expenses of between $5 and $7 million, and will be accretive to earnings. Total aggregate guaranteed royalty revenue for the brands equals approximately $160 million or approximately 65% of the purchase price.

According to Neil Cole, Chairman and CEO of Iconix Brand Group, “This is a transformative acquisition for Iconix as our brand portfolio now transcends the fashion industry with the addition of four iconic home brands. These brands have a combined three hundred years of history and a level of awareness and authenticity that few brands in any category can match. We believe that the home industry is an ideal fit for our first acquisition outside of fashion as there is a lack of innovative marketing and differentiation among brands. I believe that our marketing expertise will enable us to maximize the potential of these iconic brands and realize numerous growth opportunities including extending their reach into new categories in the home as well as into new markets around the world and developing some of the additional smaller brands within the Pillowtex portfolio.”

The purchase price for the acquisition will be paid by Iconix in cash. The acquisition is anticipated to close later this year and is subject to customary closing conditions including clearance under the Hart-Scott-Rodino Anti Trust Improvements Act of 1976, as amended.