Cherokee Inc is adding Hi-Tec Sports to its brand line-up

Cherokee Inc is adding Hi-Tec Sports to its brand line-up

Brand management firm Cherokee Inc has inked a deal to acquire global footwear firm Hi-Tec Sports International for US$95.8m.

The agreement, made on a cash-free, debt-free basis, will see Cherokee make a number of asset sales to fund part of the acquisition, including those related to Hi-Tec's wholesale operations to new operating partners. This will result in a total purchase price retained by the company of around $62m.

On closing the Hi-Tec acquisition, the new operating partner licensees will enter into license agreements with Cherokee, through which they will pay the company royalties for the future use of certain Hi-Tec intellectual property. 

To fund a portion of the purchase price, Cherokee has also entered into a commitment letter for a new $50m credit facility with Cerberus Business Finance, and a commitment letter for a $5m receivables funding loan to be provided by company chairman Jess Ravich.

In its second-quarter, Cherokee offered an optimistic outlook, despite issuing mixed results. GAAP net income totalled US$1.5m from $1.9m in the year ago period, while revenues of $8.5m were flat with the prior-year period. 

US Q2 in brief - The Finish Line, Cherokee, Zumiez, Vince Holding, Tailored Brands