Authentic Brands Group has received a major vote of confidence — and a new majority investor — in the form of BlackRock.
The world’s largest asset management firm has invested $875 million into the brand management company through its Long Term Private Capital arm in a deal that will allow ABG to more aggressively expand globally and digitally.
Under the terms of the deal, BlackRock will work closely with ABG’s existing management team led by Jamie Salter, chairman and chief executive officer, and Nick Woodhouse, president and chief marketing officer. ABG’s other investors, which include Leonard Green & Partners, General Atlantic, Lion Capital, Simon Property Group, Brookfield Properties’ retail group and Shaquille O’Neal, all continue to be involved but have “sold down” their stakes, Salter explained.
“The strategic investment by LTPC is a testament to the success we have had building a leading platform for the ownership and development of brand and media content,” Salter said. “BlackRock’s scale, global footprint and digital capabilities will enable us to build out our organization and continue our domestic and international growth trajectory. This investment marks an important and exciting next phase of expansion for ABG.”
In addition to BlackRock, this investment round — ABG’s third since its founding nearly a decade ago — includes $80 million from Jasper Ridge Partners, a California-based company, and $150 million from GIC Private Limited, Salter said.
“I continue to be the single largest individual shareholder,” he explained, “but BlackRock is now our largest shareholder.”
“ABG is an innovator in the licensing and branding industry,” said Colm Lanigran, senior member of BlackRock’s Long Term Private Capital Team. “I have known Jamie and Nick for almost 10 years and have watched as they’ve established this company as a leader in the licensing industry by successfully capitalizing on trends and continuing to innovate in the evolving consumer space. They have built a best-in-class business model and grown it with flawless execution. We believe there is substantial growth still ahead for ABG and look forward to partnering with Jamie and Nick to build a global platform that converges the worlds of fashion, health and wellness, sports, culture and entertainment.”
“We are delighted to have ABG as LTPC’s first investment,” added André Bourbonnais, global head of Long Term Private Capital. “ABG represents exactly the type of high-quality business run by a proven management team that we target with our investment strategy. ABG will have the full support of the LTPC team, our operating partners and the BlackRock platform. We look forward to a long and prosperous relationship.”
ABG was founded in 2010 and has created a company that manages more than 50 brands and generates close to $10 billion in annual sales in more than 70 countries. Among its brands are Marilyn Monroe, Elvis Presley, Muhammad Ali, Shaquille O’Neal, Greg Norman, Thalia Sodi, Neil Lane, Nautica, Aéropostale, Vince Camuto, Nine West, Juicy Couture, Frye, Spyder, Prince and Judith Lieber. Its most recent acquisition was of Sports Illustrated for $110 million at the end of May.
ABG’s name has also been mentioned as a possible acquirer of everything from Barneys New York to J. Crew. Salter said that he is “definitely interested in Barneys,” and in fact, revealed that ABG is “part of the G. Riley deal.” The storied luxury retailer filed for bankruptcy a week ago and secured about $218 million in debtor-in-possession financing from Brigade Capital Management LP and B. Riley Financial Inc.
“ABG underwrote part of that deal,” Salter said. “We backed them up on the IP [intellectual property.]” How that will eventually play out for ABG remains to be seen. “We are still waiting for them to start the process of looking for a new owner,” Salter said. Barneys is still looking for a third-party white knight and has said it plans to close 15 of its 22 stores.
Salter said that regardless of what happens with Barneys, ABG is “in discussions” with five different companies as possible acquisition targets at this time. “We don’t know which ones we’ll get, but we’re going to be very aggressive with some very large acquisitions.”
Regarding the BlackRock deal, Salter said, “To do a transaction of this size and magnitude with the largest financial institution in the world is a life-changing day for me. It’s going to open many doors around the world that we might not have had access to in the past. It will help drive our global expansion and digital strategy.”
Despite its size, Salter said ABG is still “a very young, energetic company. We set out to create an entertainment, lifestyle and media company that’s all about content and innovation. Those are fancy words that everybody uses, but we’ve achieved it.”
He attributed the company’s success to the 211 people that work at ABG as well as its 900 licensed partners. “This would not have been possible without human capital,” he said. He pointed in particular to his longtime partner Woodhouse as well as all four of his sons who now work for the company —quite possibly his proudest achievement.
“My hand is out there to say thank you to every one of them,” he said.
In this deal, BofA Merrill Lynch acted as the exclusive financial advisor to LTPC. BlackRock Long Term Private Capital is a private equity fund backed by BlackRock, Inc., which manages more than $6.8 trillion worldwide.