NEW YORK — Iconix Brand Group Inc. is the winner in the acquisition stakes for Mossimo Inc.
The company said Thursday it entered into a definitive agreement with Cherokee Inc. to buy out the Mossimo finders agreement for $33 million in cash, payable upon the closing of the Iconix/Mossimo agreement. As part of the agreement, Cherokee has withdrawn its offer to purchase Mossimo.
The finder’s agreement provides for Cherokee to receive 15 percent of all earned royalties received from Mossimo’s license with Target Stores in perpetuity in exchange for finding and brokering the license agreement.
As reported, Mossimo and Iconix entered into a merger agreement March 31. Two weeks later, Cherokee jumped into the fray with an offer to buy Mossimo.
With the agreement in place, Iconix will pay $7.50 per share for the outstanding shares of Mossimo, and the $33 million to Cherokee.
In a research note, Todd Slater of Lazard Capital Markets, wrote, “This is a very positive development, in our view, as it eliminates a cloud over the Mossimo transaction and provides Iconix the full benefit of Mossimo’s future revenue stream.”