Iconix Brand Group Announces Definitive Agreement to Acquire United Media Licensing Owner of Peanuts Characters
NEW YORK, April 27 /PRNewswire-FirstCall/ -- Iconix Brand Group, Inc. (Nasdaq: ICON) ("Iconix" or the "Company"), today announced that it has signed a definitive agreement with United Features Syndicate, Inc. ("UFS") and The E.W. Scripps Company ("Scripps") to acquire the Peanuts brand and related assets in partnership with the Schulz family. As part of the transaction, Iconix will also acquire the licensing and character representation business of United Media Licensing, a division of UFS, which, in addition to Peanuts, represents a number of character brands, including Dilbert and Fancy Nancy. The Peanuts brand and other acquired assets will be purchased through a newly formed subsidiary, which will be owned 80% by Iconix and 20% by the Schulz family.
The cast of Peanuts, includes, among others, iconic and well known characters such as Charlie Brown, Snoopy, Lucy, Linus, Sally, Schroeder, Peppermint Patty and Woodstock. Peanuts has a strong diversified global licensing platform with over 1,200 licensing agreements including relationships with MetLife, Hallmark, Universal Studios, Warner Bros., Cedar Fair, H&M, Benetton, Old Navy, CVS and Walgreens. The Peanuts brand is licensed in over 40 countries and generates annual retail sales of over $2 billion.
"We are excited to embark on this transformative deal for our Company," stated Neil Cole, Chairman and CEO of Iconix Brand Group, Inc. Cole added, "The Peanuts brand is iconic, with some of the most beloved and well known characters in history. Peanuts is considered one of the most influential comic strips of all time and with its 60th anniversary this year the characters continue to be as popular as ever. Owning the Peanuts business moves Iconix well beyond fashion into a true global brand management entity with a wide variety of agreements that range from theme parks to media to financial institutions. It also extends our international platform with Peanuts licensed in over 40 countries and approximately two-thirds of its revenue coming from outside of the U.S. After closing this transaction, Iconix will be diversified with fashion only representing approximately two-thirds of our revenue. Further, we believe Peanuts large global footprint and broad licensing relationships will also open up new doors for our existing portfolio of brands and future acquisitions. We are equally excited to have the Schulz family as our partners and believe their passion and insight will be invaluable to the future success of the Peanuts brand."
Jean Schulz, wife of the late Charles M. Schulz, commented, "We are grateful and proud of the active partnership we have had with United Media for the past 60 years. From the beginning, my husband worked directly with the people using his art to preserve the authenticity of his characters. Since his death, we have continued to do the same, working directly with our licensees to be true to my husband's art." She added, "As we look to the future, it is a joy to partner with a company whose founder is at the helm. Neil and his team have great respect for who the Peanuts characters are and they honor all we have accomplished, and the spirit with which we do business."
Craig Schulz, son of Charles M. Schulz, stated, "The Schulz family is extremely excited by the opportunity to create this partnership with Neil Cole and Iconix. Peanuts now has the best of both worlds, family ownership and the vision and resources of Iconix to perpetuate what my father created throughout the next century with all the goodwill his lovable characters bring."
The total purchase price for this acquisition is approximately $175 million of which Iconix will pay for its 80% share and the Schulz family will pay for its 20% share. Iconix portion will be funded from the Company's existing cash balance.
On a pro-forma basis the Company expects Peanuts to generate approximately $75 million in annual royalty revenue and add approximately $0.12-$0.15 in annual EPS. Different from a typical Iconix acquisition, the costs associated with the Peanuts business will be higher than the Company's existing brands as there is an existing contractual revenue share with the Schulz heirs, which is separate from the family's 20% interest in the new partnership. There are also agent commissions and additional administrative costs associated with managing over 1,200 contracts around the world. Initially, EBITDA margins for this business are expected to be in a range of approximately 20%-25%. In 2010, the accretion will be impacted by deal costs and will depend on the timing of the close.
About Iconix Brand Group, Inc.
Iconix Brand Group, Inc. (Nasdaq: ICON) owns, licenses and markets a growing portfolio of consumer brands including CANDIE'S (R), BONGO (R), BADGLEY MISCHKA (R), JOE BOXER (R) RAMPAGE (R) MUDD (R), LONDON FOG (R), MOSSIMO (R) OCEAN PACIFIC(R), DANSKIN (R) ROCA WEAR(R), CANNON (R), ROYAL VELVET (R), FIELDCREST (R), CHARISMA (R), STARTER (R) and WAVERLY (R). In addition, Iconix owns an interest in the ARTFUL DODGER (R), ED HARDY (R), ECKO (R), MARC ECKO (R), ZOO YORK (R) and MATERIAL GIRL™ brands. The Company licenses its brands to a network of leading retailers and manufacturers that touch every major segment of retail distribution from the luxury market to the mass market in both the U.S. and around the world. Iconix, through its in-house advertising, promotion and public relations agency, markets its brands to continually drive greater consumer awareness and equity.
About Charles M. Schulz Creative Associates
Charles M. Schulz Creative Associates was established to work in partnership with United Media on the creative and business management of the PEANUTS worldwide licensing program, providing creative oversight to the over 1,200 PEANUTS licensees and art direction for over 24,000 products a year. Creative Associates is located in Charles Schulz's hometown of Santa Rosa, California, where the PEANUTS creator maintained his studio for over thirty years. On the same property Schulz built an ice arena, cafe, and gift shop. In August 2002, two years after his death, the Charles M. Schulz Museum and Research Center opened adjacent to his studio. The museum fulfills its mission to preserve, display, and interpret the life and art of Charles M. Schulz by offering rotating exhibitions of original art and personal artifacts, showcasing Schulz and his cartoon creations Charlie Brown, Snoopy, and the whole Peanuts Gang.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. The statements that are not historical facts contained in this press release are forward looking statements that involve a number of known and unknown risks, uncertainties and other factors, all of which are difficult or impossible to predict and many of which are beyond the control of the Company, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors include, but are not limited to, uncertainty regarding the results of the Company's acquisition of additional licenses, continued market acceptance of current products and the ability to successfully develop and market new products particularly in light of rapidly changing fashion trends, the impact of supply and manufacturing constraints or difficulties relating to the Company's licensees' dependence on foreign manufacturers and suppliers, uncertainties relating to customer plans and commitments, the ability of licensees to successfully market and sell branded products, competition, uncertainties relating to economic conditions in the markets in which the Company operates, the ability to hire and retain key personnel, the ability to obtain capital if required, the risks of litigation and regulatory proceedings, the risks of uncertainty of trademark protection, the uncertainty of marketing and licensing acquired trademarks and other risks detailed in the Company's SEC filings. The words "believe", "anticipate," "expect", "confident", "will", "project", "provide" "guidance" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date the statement was made. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Iconix Brand Group, Inc. Contacts:
Iconix Brand Group
VP of Public Relations
Contact for Schulz Family:
Charles M. Schulz Creative Associates
SOURCE Iconix Brand Group, Inc.