Iconix Brand Group to buy Mossimo, Mudd brand

03 Apr '06

4 min read

Clothing and footwear licensor Iconix Brand Group Inc has announced that in two separate transactions it signed definitive agreements to acquire Mossimo Inc and the Mudd trademark. It will buy all of the outstanding shares of Mossimo for $7.50 per share, comprised of $3.25 a share in Iconix stock and $4.25 in cash.

The total purchase price for Mossimo Inc will be approx. $119 million subject to a potential one time adjustment of up to an additional $16 million in Iconix stock to be issued if the Iconix stock price does not appreciate to a level that would value the deal at $8.50 per share within one year of closing.

Under the terms of the merger agreement, Mossimo Inc will have $17 million of cash in the company that Iconix will acquire upon closing. The Mossimo brand is projected to generate $20 - $25 million in 2007 royalty revenue.

The transaction has been approved by the respective Board of Directors of both Iconix and Mossimo Inc. The merger is subject to approval by the stockholders of Mossimo Inc, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, receipt by Mossimo Inc of a fairness opinion, and other customary closing conditions and is expected to close in July of 2006.

Mossimo Inc designs apparel and related products, primarily under the Mossimo label and licenses them to Target Corporation, which has exclusive rights for production and distribution of all Mossimo branded products sold in the United States.

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