US: Fifth & Pacific closes $225m Lucky Brand sale
Fifth & Pacific Companies has completed the sale of Lucky Brand Jeans to an affiliate of private equity firm Leonard Green & Partners, in a deal worth US$225m.
Linked to the closing of the deal, Carlos Alberini has been appointed chairman and CEO of Lucky Brand Jeans.
Net proceeds from the sale of Lucky Brand Jeans, which was announced at the end of last year, and Juicy Couture are expected to be between $370 and $380m.
Fifth & Pacific Companies last month revealed it would change its name to Kate Spade & Company this year to reflect its single-brand focus.
|FIFTH & PACIFIC COMPANIES, INC. COMPLETES SALE OF LUCKY BRAND JEANS|
Divestitures of Juicy Couture and Lucky Brand Jeans expected to result in estimated net proceeds of $370 to $380 million
New York, NY - February 3, 2014 - Fifth & Pacific Companies, Inc. (NYSE:FNP) announced today that it has completed the sale of Lucky Brand Dungarees, Inc. to an affiliate of Leonard Green & Partners, L.P. (LGP) for total consideration of $225 million, with $140 million in cash at closing and the remaining $85 million financed in the form of a three year, secured, seller note, subject to certain capital adjustments. The seller note can be repaid at any time prior to the end of its three year term, bears cash interest of $8 million per year, and provides for interest to accrete as additional principal in the amount of $5 million per year, resulting in a $100 million maximum payment obligation at maturity. Lucky Brand Jeans has also assumed the proportionate share of the Company's sourcing contract with Li & Fung in addition to other related Fifth & Pacific Companies obligations.
In connection with the closing of the acquisition, Carlos Alberini, formerly Co-Chief Executive Officer of Restoration Hardware Holdings, Inc., will become the Chairman of the Board and Chief Executive Officer of Lucky Brand Jeans. Mr. Alberini is also making a significant equity contribution in connection with the acquisition of Lucky Brand Jeans.
Fifth & Pacific Companies, Inc. will support the transferred business through a Transition Services Agreement (TSA) with Lucky Brand Jeans while Lucky Brand creates a standalone infrastructure. The TSA is expected to span up to 24 months.
Taken together, the divestitures of Juicy Couture and Lucky Brand Jeans are expected to result in estimated net proceeds of $370 million to $380 million, which includes the face value of the seller note in the Lucky Brand transaction. The aggregate net proceeds for the two transactions reflect estimated cash restructuring and other transition costs and charges associated with the assignment or termination of leases, severance and other associated transition activities, including estimated costs and charges previously disclosed.
Centerview Partners and Perella Weinberg Partners advised Fifth & Pacific Companies, Inc. on this transaction. Paul, Weiss, Rifkind, Wharton & Garrison LLP was FNP's legal advisor. Latham & Watkins LLP was LGP's legal advisor.
About Fifth & Pacific Companies, Inc.
Fifth & Pacific Companies, Inc. owns the Kate Spade family of brands including kate spade new york, Kate Spade Saturday and Jack Spade. In addition, the Adelington Design Group, a private brand jewelry design and development group, markets brands through department stores and serves jcpenney via exclusive supplier agreements for the Liz Claiborne and Monet jewelry lines. In November 2013, the Company completed the sale of the Juicy Couture intellectual property to Authentic Brands Group (ABG) and is working under a license from ABG as the Company transitions and winds down the Juicy Couture business through 2014. The Company also has a license for the Liz Claiborne New York brand, available at QVC, and Lizwear, which is distributed through the club store channel. Visit www.fifthandpacific.com for more information. Fifth & Pacific Companies, Inc. is scheduled to change its name to Kate Spade & Company following the release of fourth quarter earnings results on Tuesday, February 25, 2014, after which the Company will begin trading as NYSE:KATE.
Original source: http://www.fifthandpacific.com/web/guest/pressreleases
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