NexCen Brands closed its acquisition of The Athletes Foot last week and added some color to future strategies during a conference call with analysts. NexCen itself is a company in the middle of a transition. Previously, it ran a Mortgage Backed Securities business, but recently acquired UCC Capital, a financial advisory firm with a long history of mergers and acquisitions. With the acquisition, Bob DLoren took over control of NexCen and is now in the process of selling off the MBS business and turning NexCen into a holding company with The Athletes Foot as its first brand.
The holding company will pursue three different areas of business under three different vertical divisions. The first vertical is retail franchising (which is where TAF is currently located). The second vertical is ownership of consumer branded products brands. The third is quick service restaurant franchising. NexCen is finalizing an “acquisition warehouse” line of credit of roughly $150 million and will recycle the warehouse line by issuing term debt in the asset-backed securities market. The company plans to fund acquisitions with 50% leverage. The current plan is to make three to five acquisitions per year.