The agreement includes the license agreements entered into in connection with Lands’ End’s licensing business.
WHP Global “will leverage its global brand-management platform to accelerate Lands’ End’s expansion across new categories and channels, and international markets, to generate new high-margin royalty streams and extend the brand’s global footprint.”
WHP Global’s brands include Vera Wang, Rag & Bone, Joe’s Jeans, G-STAR, Express, Bonobos, Anne Klein, Express, Lotto, Joseph Aboud, Warners, Toys’ R Us, and Babies R Us.
Lands’ End maintains full operational control of its core direct-to-consumer (DTC) and business-to-business (B2B) businesses,. The company has used the majority of the proceeds to fully repay its $234 million term loan, significantly reducing interest expense and strengthening its balance sheet. This improved capital structure provides the company increased flexibility to pursue strategically and financially accretive opportunities to drive long-term stockholder value.
Andrew McLean, chief executive efficer of Lands’ End, stated: “Creating this joint venture with WHP Global is a pivotal milestone for Lands’ End and positions us for a stronger, faster, and more globally diversified growth trajectory. WHP Global’s extensive brand-development platform will enable us to amplify the reach of the Lands’ End brand far beyond what we could pursue independently, while we maintain our disciplined focus on operational excellence across our DTC and B2B businesses. At the same time, by fully paying down our term loan, we now have greater financial flexibility to pursue strategic opportunities that advance our mission. Alongside this JV, we’ve built a powerful, multi-faceted foundation for sustained value creation.”
Yehuda Shmidman, founder, chairman and CEO of WHP Global, added: “This milestone transaction marks the next phase of growth for Lands’ End. With the brand’s strong foundation and WHP Global’s global platform, we are well positioned to expand into new categories and markets to drive long-term value for all.”
Additional Stockholder Upside Through Potential WHP Global Equity Participation
In the event of a qualifying WHP Global monetization – such as a public listing or majority sale of WHP Global – Lands’ End may exchange its JV stake for equity in WHP Global at the same valuation multiple as represented by the WHP Global monetization transaction. This structure provides Lands’ End stockholders with a unique, additional pathway to participate in WHP Global’s platform-driven value creation.
Tender Offer by WHP Global
In a separate press release, WHP Global announced that it has completed its tender offer for approximately $100 million of Lands’ End shares at a price of $45.00 per share. The tender offer was oversubscribed, and thus subject to proration. Following the tender offer, WHP Global owns approximately 7 percent of Lands’ End’s outstanding shares of common stock.
Advisors
Perella Weinberg Partners served as financial advisor to Lands’ End, and Wachtell, Lipton, Rosen & Katz served as legal advisor. Morgan Stanley & Co. LLC served as financial advisor to WHP Global, and Kirkland & Ellis LLP served as legal advisor. Morgan Stanley Senior Funding, Inc. provided committed debt financing to support the acquisition.
Image courtesy Lands’ End
