Liz Claiborne has agreed to sell its climbing and yoga wear brand Prana for around US$40m to Prana Living LLC, a company formed by Prana's management team and private equity firm Steelpoint Capital Partners.

It is the latest transaction in a branded sell-off at Liz Claiborne, planned after a strategic review in June last year. The transaction is expected to close in the first quarter of 2008.

The purchase price consists of a $36.5m cash payment payable at closing and a contingent cash payment of up to $4.0m based on actual 2008 EBITDA, the company said.

It expects to realise net cash proceeds of $18.1m at closing as a result of the sale, after settling a contingent earnout obligation of $18.4m payable to Prana's founders.

This $18.4m payment is expected to be recorded as a charge to first quarter 2008 earnings, Liz Claiborne said.

Scott Tierney, managing director of Steelpoint Capital Partners, said: "We are pleased to sponsor the management buyout of Prana.

"The company's passionate founders, employees and customers have built a leading brand in the yoga and outdoor markets. With a committed capital partner, we believe Prana will continue to thrive as an independent company."

William McComb, chief executive officer of Liz Claiborne, said: "We were pleased with the interest that Prana generated with potential buyers. Steelpoint is the right partner to help Prana realise its potential and flourish as a brand."

Liz Claiborne said it has now concluded the strategic reviews of 13 of the 16 brands it had placed under review.

The strategic review of the remaining brands Ellen Tracy, Kensie, and Mac & Jac is on schedule to be completed by the end of the first quarter of 2008, the company added.

On the 8 January Liz Claiborne announced the sale of its Laundry By Design and C&C California brands to Perry Ellis International, together with plans to shutter its Sigrid Olsen line.

The company is looking to focus on smaller, more powerful labels and develop its own retail businesses.