Third acquisition for Iconix Brand in five months

ANALYSIS_ Clothing brand licensing company Iconix Brand Group Inc (ICON) has acquired the remaining 49 percent interest in IP Holdings Unltd LLC for 45 million dollars in cash. This is the third acquisition for the group in less than five months,

after Lee Cooper, Buffalo David Bitton and Umbro.

"We look forward to continuing our strong relationship with Iconix and being the leader in youth culture branding, merchandising and design," said Seth Gerzsberg, CEO, Marc Ecko Enterprises.

Iconix had previously acquired a 51 percent stake in IP Holdings Unltd LLC in 2009. IP Holding manufactures and markets fashion and lifestyle products in the United States and internationally and owns brands such as Ecko Unltd. and Marc Ecko Cut & Sew.

"We believe there is a strong growth opportunity in the youth culture market around the world and are thrilled to increase our equity in the Ecko Unltd. and Cut & Sew brands. We look forward to continuing to work with our licensees as well as the MEE team to further expand the businesses," commented, Neil Cole, CEO, Iconix Brand Group.

As advanced by both parties in a statement released earlier this week, Marc Ecko Enterprises (MEE) will continue to remain the core apparel licensee for the brands. In addition, the sellers will no longer be obligated to pay about 52 million dollars in IP Holdings debt, highlighted analysis team at Zacks. They currently hold a ‘strong buy’ recommendation on the stock.

“We remain impressed with Iconix’s strategic acquisitions and consistent expansion of licensing agreements. Iconix expects to explore additional opportunities and enhance its portfolio with more iconic brands in the upcoming quarters. Iconix expects to deliver over 20 percent revenue and earnings per share growth for 2013. Iconix holds a Zacks Rank #1 (Strong Buy).”

Three acquisitions in five months

This is the third successful acquisition for Iconic Brands Group in the past half a year, been that most recent that of Lee Cooper. In February, Iconix acquired Lee Cooper, which includes multiple lifestyle categories including men’s and women’s casual wear, footwear and accessories.

Earlier that month, Iconix embarked in a joint venture with Buffalo International ULC to acquire a 51 percent interest in the Buffalo David Bitton brand. The transaction was sealed at about 76.5 million dollars in cash, with Iconix controling the joint venture and Buffalo International remaining the main licensee.

Finally, in December last year, Iconix acquired football brand Umbro from Nike, Inc. for 225 million dollars in cash.

The company has a market cap of 1.726 billion dollars and a price-to-earnings ratio of 18.29.