NexCen Brands, Inc. has entered into a definitive agreement to acquire the Bill Blass Holding Co., Inc. This acquisition will also include two subsidiaries owned by Blass, Bill Blass Licensing Co., Inc. and Bill Blass International LLC. In addition, the Company has entered into a license agreement for men's and women's denim with Designer Licensing Holdings, LLC (“DLH”), effective upon closing of the transaction. An affiliate of DLH will also acquire a 10% minority interest in the Company's Bill Blass trademark subsidiary.
Robert W. D'Loren, NexCen's President and Chief Executive Officer, stated: “Bill Blass is a lifestyle brand that represents the best of timeless and classic American design.” He noted further, “We could not think of a more suitable brand for our portfolio that we expect will be a fashion icon for years to come.” “This acquisition is an exciting opportunity for NexCen,” Mr. D'Loren said in closing.
“This is a mutually beneficial opportunity for Blass and for our couture designer, Michael Vollbracht,” said Michael Groveman, President and CEO of Blass. “We've spent years working with Bob D'Loren and look forward to working with him at NexCen. We anticipate a very successful endeavor, and one that will help to further enhance the Bill Blass brand,” Mr. Groveman said.
Haresh Tharani, Chairman of Blass stated that he was very pleased with the transaction and the opportunity to become a shareholder in NexCen. Tharani, who is also Chairman of the Tharanco Group and Resource Club, LTD, stated that as part of this transaction DLH will be assuming the license for denim products and will start shipping as of fall 2007. Resource will continue to ship product until that time.
Mr. Groveman and Mr. Vollbracht will continue to be involved in Bill Blass Limited, the Blass couture business.
NexCen will pay $54.6 million at closing through a combination of cash and the issuance of NexCen common stock. The stock component is 28% or $15.5 million of the initial purchase price. NexCen also agreed to an earn-out arrangement that will entitle the sellers to receive an additional amount of up to $16.2 of cash or stock for a potential total aggregate payment of $70.8 million including the consideration paid at closing. The additional amount will be paid if gross royalties generated by the Bill Blass trademark for the trailing 12 month period ending December 31, 2007 meet certain performance targets. NexCen anticipates that the brand will generate approximately $10 million of royalty revenue and approximately $.07 per share of incremental EPS in 2007. The transaction is expected to close in January 2007.