LOS ANGELES — Danny Guez, the son of denim veteran Paul Guez, took the companies that produce Justin Timberlake’s William Rast clothing label and the People’s Liberation contemporary brand public last week through a reverse merger.
Century Pacific Financial Corp., a shell company that is based in Vero Beach, Fla., and trades on the Over-the-Counter Bulletin Board, acquired Versatile Entertainment Inc. and Bella Rose LLC on Nov. 22. Versatile makes People’s Liberation and Bella Rose produces William Rast clothing and accessories in a partnership with Timberlake and his friend, Trace Ayala.
Century’s board agreed to change its name to People’s Liberation Inc. and enact a 1-for-9.25 reverse stock split. The company also raised $7.8 million in a private placement.
Danny Guez, the 28-year-old president of Versatile and partner in Bella Rose, became chief executive officer, president and director of Century, which will be based in Los Angeles.
He is the latest manufacturer to use a reverse merger to take a company public. Los Angeles’ True Religion Apparel Inc. started the trend in 2003 and Paul Guez turned Antik Denim LLC in Commerce, Calif., into publicly traded Blue Holdings Inc. through a reverse merger in April.
Century forecast that revenue will reach about $5.8 million in 2005 and $26 million in 2006. In the nine months ended Sept. 30, the combined operations of Versatile and Bella Rose posted a net loss of $256,000 on revenue of $2.9 million.
According to documents filed with the Securities and Exchange Commission, a business entity coowned by Timberlake will receive the greater of 50 percent of the net profits of the William Rast apparel line or 6 percent of net sales.