Pacific Vector Holdings Inc. has completed its acquisition of a controlling stake in DNA LLC, which owns the Alien Workshop, Habitat and Reflexthe skateboarding brands. Pacific Vector had been operating the business since Oct. 2, when it announced the deal.
Through its wholly owned subsidiary, PVH DNA Inc., the Pacific Vector purchased a controlling interest in DNA LLC (“DNA”) and has entered into an ongoing licensing agreement with DNA LLC which allows PVH DNA Inc. to capture 100 percent of the operations going forward.
DNA, which as been in operation for 23 years, has trailing twelve months sales of over $7.5 million.
The controlling interest in DNA was purchased for the issuance of 250,000 stock options and $1.5 million in the form of an earn out that will be payable at 8 percet of DNA branded sales with the first payment due twelve months from closing of the transaction. Following payment of the earn out in full, PVH DNA Inc. will pay its controlled subsidiary, DNA LLC an ongoing licensing fee of 6 percent of net sales.
Contemporaneously with closing DNA entered into a new factoring agreement with Bibby Financial which replaces the previous agreement with CIT. The agreement with Bibby expands the borrowing base for DNA and will allow for quicker expansion of the DNA business.
“We have been operating the DNA LLC brand for over a month and I am more impressed than ever with the strength of the brand and the excitement in the market,” said Chad Foreman, President of Brands at Pacific Vector. “DNA provides a great foundation for the brand division and has exceptional growth opportunities both domestically and in international markets.”
Pacific Vector Holdings CEO Rob Reynolds said the DNA deal is indicative of further acquisitions the company may make as it develops its wholesale division.
DNA will join the growing list of brands that Pacific Vector controls in the action sports/lifestyle channel.
