Jenna Dewan Tatum behind the scenes at Danskin's fall 2016 ad campaign shoot in Los Angeles.

Iconix Brand Group said it has signed a deal to sell its interest in the Peanuts and Strawberry Shortcake brands to DHX Media Ltd. for $345 million in cash.

The transaction is subject to a customary working capital adjustment. The deal is expected to close by the end of the second quarter. The company said going forward, the entertainment segment will be reported as a discontinued operation. Iconix also said it expects that the elimination of earnings from the entertainment segment will be offset by interest savings from the reduction of debt.

The company will use the net process from the transaction, plus additional cash on the balance sheet, to pay down $362 million of debt. The payment includes a mandatory payment of $152 million of the company’s senior secured notes issued under the firm’s securitization facility, and the full extinguishment of the $210 million outstanding balance of its Senior Secured Term Loan.

Iconix acquired its 80 percent interest in the Peanuts brand in June 2010, and in March 2015 added Strawberry Shortcake to its portfolio. The acquisition cost for the two brands was $246 million.

John Haugh, chief executive officer, said, “One of our strategic objectives has been to de-lever and strengthen our balance sheet. This sale aligns with that objective.”

Haugh explained that selling the entertainment division will enable the company to reduce debt and pay down an “expensive and highly restrictive” term loan.

“We are now focused on a second strategic objective of driving profitable revenue growth by focusing our resources on the businesses where we have a leadership position — fashion, active and home,” the ceo said.

Apparel-related brands include Candie’s, Bongo, Joe Boxer, Mossimo and Lee Cooper and London Fog, while the active and ath-leisure category includes Umbro and Danskin. Its home brands include Royal Velvet, Fieldcrest and Waverly.

Haugh touted the company’s contribution to the brands, particularly Peanuts. In partnership with the Schulz family, the company produced the “first-ever feature film, delivered countless worldwide collaborations and significantly grew the worldwide presence of Peanuts,” he said.

Separately, Iconix posted first-quarter results in which it reported a first-quarter net loss of $4.3 million, or 9 cents a diluted share, against net income of $18.6 million, or 38 cents, a year ago. Excluding certain items, adjusted net income was $1.4 million, or 2 cents a diluted share, for the first quarter of the year. The company said licensing revenue fell 13.2 percent to $58.7 million from $67.7 million.

Haugh said of organic growth, “There have been some challenges, but we are working on initiatives that should drive improved revenue performance in the back half of the year. In addition, we have the right expense controls in place to be able to mitigate revenue risk, giving us further confidence in our full year outlook.”

For the year, the company updated guidance to reflect the loss of revenue from the entertainment business as well as from its sale of Sharper Image earlier this year, as well as the expected loss related to the early extinguishment of debt. It is now projecting EPS of between 29 cents and 44 cents on a GAAP basis, and full-year revenues in the range of $235 million to $245 million.

 Shares of Iconix fell 4.3 percent to close at $6.70, but jumped 20.4 percent to $8.06 in after-market trading.

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