Founded in 1985, Buffalo is a lifestyle brand consisting of denim, sportswear, activewear, and accessories. Buffalo is primarily sold through better department stores including Macy's, Dillard's and Lord & Taylor, and has 30 stand-alone retail stores, mainly in Canada, operated by the core licensee.
Neil Cole, CEO, Iconix Brand Group, Inc., commented, "The Bitton brothers have built a powerful lifestyle brand. We look forward to leveraging our licensing and brand management expertise to further grow the business and expand its retail footprint in the U.S. and Canada, as well as internationally."
Gabriel Bitton, CEO, Buffalo International ULC, commented, "Iconix is recognized as the leader in brand management and has a strong track record of building worldwide brands. We are excited to be working with Neil Cole and the rest of the Iconix team to grow Buffalo to the next level through Iconix's strong and proven global platform."
For its 51% interest in Buffalo, Iconix paid $76.5 million in cash. On an annualized basis, the Company expects the Buffalo brand to generate approximately $25 million in royalty revenue with an EBITDA margin of approximately 75-80% for the new joint venture.
The Company is raising its 2013 revenue guidance to a range of $415-$425 million from $395-$405 million. The Company is raising its 2013 non-GAAP diluted EPS guidance to a range of $2.00-$2.10 from $1.85-$1.95, and its 2013 GAAP diluted EPS guidance to a range of $1.90-$2.00 from $1.75-$1.85.
The Company's increase in its guidance is related to the Buffalo acquisition and increased share repurchase activity. To reflect the increased share repurchases, the Company's weighted average diluted share count is estimated to be approximately 67-68 million for 2013. Since the authorization of its current $200 million share repurchase plan, the Company has repurchased approximately $175 million or 13% of its shares outstanding.
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