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Sequential Brands Group Inc. has acquired the Revo sunglass brand for $20 million in cash from Oakley Inc., which is owned by Luxottica Group SpA.
The cash transaction, which represents the fourth deal Sequential has completed so far this year, will be funded through cash on hand. Earlier in the year, the brand management firm picked up Heelys, Ellen Tracy and Caribbean Joe. The firm has a total of seven brands in its portfolio. The other brands are William Rast, People’s Liberation and DVS Action Sports.
The purchase includes Revo’s intellectual property plus certain other assets.
RELATED STORY: Sequential Buys Ellen Tracy, Caribbean Joe >>
Revo is a high-end performance line that contains the same technology NASA uses for satellites to deflect radiation. The glare-blocking feature via high-contrast polarized lens technology is ideal for outdoor sports and activities as it blocks 100 percent of UVA, UVB and UVC light.
Following the sale of Revo, Luxottica will still have as its high-end performance brands Ray-Ban and Persol. Luxottica, started in 1961 by Leonardo Del Vecchio, acquired Persol in 1995, Ray-Ban in 1999, Sunglass Hut International Inc. in 2001 and Oakley in 2007. Revo, launched in 1985, was part of the Ray-Ban acquisition from Bausch + Lomb, and later moved under the Oakley umbrella.
It was Revo’s premium performance positioning that attracted Sequential to the brand, according to Yehuda Shmidman, the group’s chief executive officer.
“The vision we have for the brand is one where we believe Revo can be extended to many relevant categories within performance: outdoor space, outdoor gear, footwear, active apparel and technical apparel for outdoors. We believe this is a unique opportunity to leverage a brand that’s truly authentic,” Shmidman said.
Sequential has signed a long-term partnership agreement with Sunglass Hut to continue the distribution of Revo-branded eyewear at Sunglass Hut stores globally. The agreement with Sunglass is nonexclusive, so Revo-branded eyewear can be sold at other retailers as well.
B. Robinson also inked an agreement with Sequential for a long-term licensing agreement for the manufacture of Revo sunglasses and related product. The eyewear manufacturer also manufactures for Cole Haan, Cynthia Rowley and Izod.
While the ceo declined to discuss the brand’s volume, he noted, “Sequential is actively eyeing brands that it believes can do $100 million at retail over the next few years.”
In that quest, Sequential is still in acquisition mode and expects to do more deals. It is hoping to do two to three deals a year over the next few years.
As for the opportunities that are out there, Shmidman said, “These are interesting times. There are a number of brands that we believe will change hands. We are really focusing on brands where we have the ability to grow them within our brand management licensing model.”
Sequential at the end of July closed on a private placement with a group of accredited investors in which the firm netted $44 million from the sale of 8 million shares of common stock exempt from Securities and Exchange Commission registration at $5.50 a share. Sequential ended the month with $57 million in cash on hand. Following the Revo transaction, Sequential has $37 million in cash on its balance sheet to support its acquisition strategy. The company also has leveraged financing available through Bank of America Merrill Lynch.
Sequential posted net income of $693,000, or 4 cents a diluted share, for the second quarter ended June 30, against a net loss of $878,000, or 37 cents, a year ago. Licensing and other revenue jumped to $4.3 million from $1 million. The company converted its business to the current brand management model last year.