Iconix Brand Group finally got its wish: The brand management firm on Thursday said it entered into an agreement to purchase Official Pillowtex LLC, a home textiles licensing firm, for $231 million in cash with contingent payments of up to an additional $15 million in cash, dependent on surpassing certain revenue targets.
As first reported in April, Pillowtex has been on Iconix's radar for quite some time.
Neil Cole, chairman and chief executive officer of Iconix, said the parties have been in on-and-off talks for over a year and a half. The newest addition to the Iconix umbrella, expected to close later this year, has total aggregate guaranteed royalty revenue of $160 million, or 65 percent of the purchase price. The primary Pillowtex brands are Cannon, Royal Velvet, Fieldcrest and Charisma, and the four lines alone are expected to generate between $35 million and $37 million in 2008 royalty revenue.
The ceo isn't ruling out brand extensions into home for Iconix's apparel brands, nor an expansion of the home brands into categories such as tabletops.
Cole also hinted there could be additional deals on the horizon in fashion and apparel before yearend, including a possible one in the sporting goods sector.
"We make sure we do good deals, not just any deals. There are some interesting opportunities for this year and we continue to be acquisitive," Cole said. He perceives the current lack of liquidity to finance deals that has impacted private equity firms a plus for Iconix because "some might not be looking into areas that we are."
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