Galaxy Universal to Acquire Leading Active Brands And1, Avia, Gaiam and SPRI

Rhea-AI Summary

Galaxy Universal has announced its acquisition of the And1, Avia, Gaiam, and SPRI brands from Sequential Brands Group for approximately $330 million. This strategic move aims to enhance Galaxy's vertical integration, enabling efficient management of marketing, design, sales, sourcing, and manufacturing. The acquisition is expected to close by mid-November 2021, pending customary closing conditions. KKR is providing debt financing and co-investing in the deal, reflecting confidence in Galaxy's growth strategy.

Positive

• Acquisition of established brands enhances Galaxy's portfolio and market presence.
• KKR's involvement indicates strong investor confidence in Galaxy's growth potential.
• Vertical integration is expected to create efficiencies and improve product offerings.

Negative

• None.

NEW YORK, Oct. 29, 2021 /PRNewswire/ -- Today Galaxy Universal, LLC ("Galaxy" or the "Company"), a portfolio company of Gainline Capital Partners ("Gainline"), announced that it has agreed to acquire the And1, Avia, Gaiam and SPRI brands (together the "Active Brands") from Sequential Brands Group, Inc. ("Sequential") for approximately $330 million. The transaction is subject to the satisfaction or waiver of customary closing conditions, including court approval and is expected to close by mid-November 2021.

This transaction is a continuation of Galaxy's strategy to vertically integrate strong brands under one management operation that controls marketing, design, sales, sourcing and manufacturing. This unique platform will create efficiencies to deliver high quality athletic, work and outdoor products at the best possible value to its customers.

Galaxy is led by CEO Eddie Esses, a footwear and brand management industry veteran. "In this everchanging marketplace, we are strategically positioned to deliver on the customers' constantly evolving expectations. Galaxy is able to provide great brands, unique designs and upgraded quality at exceptional values," Esses said.

Galaxy is rapidly expanding, continuing to build on its vertical platform. This spring, the Company completed the acquisition of Apex Global Brands including, Hi-Tec, Magnum and Tony Hawk. It also has licensing deals with top brands such as Justice, London Fog and many others.

Allan Weinstein, Managing Partner of Gainline, said, "The rich heritage of these brands combined with the passion, experience and unrivaled track record of Mr. Esses and his team distinguishes this investment. We are thrilled to support this team and advance the Galaxy partnership as the company expands and future acquisition opportunities present themselves."

KKR led the debt financing for the acquisition and will participate as a co-investor. "Galaxy's vertical integration strategy and strong specialization in active products positions the company to take these great brands to new heights," said Lauren Krueger, Managing Director at KKR. "We are excited to finance the deal and invest in the future of the company as a strategic partner with the Galaxy and Gainline teams."

KKR is making its investment in Galaxy through certain private credit managed accounts.

Houlihan Lokey Inc acted as exclusive financial advisor and Willkie Farr & Gallagher LLP acted as legal advisors to Galaxy Universal LLC. Credit Suisse Securities (USA) LLC acted as exclusive placement agent to Gainline Capital Partners. Province acted as financial advisor and King & Spalding LLP acted as legal advisor to KKR. Stifel and its affiliate Miller Buckfire acted as financial advisors and Gibson, Dunn & Crutcher LLP were legal advisors to Sequential Brands.

About Galaxy
Headquartered in New York, NY, Galaxy Universal LLC is a global vertically integrated marketing, design, sales, sourcing and manufacturing company that specializes in the athletic, health and wellness, outdoor and work categories. Owned brands include And1, Avia Cherokee, Gaiam, Hi-Tec, Interceptor, Magnum, SPRI, Tony Hawk and more. The Company is a licensee of the Justice and London Fog brands, among others. With a worldwide distribution network, Galaxy sells branded athletic and work footwear in over 40,000 stores.

About Gainline Capital Partners
Gainline Capital Partners is a private equity firm that invests in profitable, U.S.-based middle market companies. The firm focuses on being the first institutional capital and specializes in partnering with management teams to help execute their vision, drive sustainable growth and create long term value. www.gainlinecapital.com 

About KKR
KKR is a leading global investment firm that offers alternative asset management and capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR's insurance subsidiaries offer retirement, life and reinsurance products under the management of The Global Atlantic Financial Group. References to KKR's investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR's website at www.kkr.com and on Twitter @KKR_Co.

View original content:https://www.prnewswire.com/news-releases/galaxy-universal-to-acquire-leading-active-brands-and1-avia-gaiam-and-spri-301411901.html

SOURCE Gainline Capital Partners

FAQ

What brands is Galaxy Universal acquiring from Sequential Brands Group?

Galaxy Universal is acquiring the And1, Avia, Gaiam, and SPRI brands.

How much is Galaxy Universal paying for the acquisition?

Galaxy Universal is acquiring the brands for approximately $330 million.

When is the acquisition of the active brands expected to close?

The acquisition is expected to close by mid-November 2021, subject to customary closing conditions.

Who is financing the acquisition of the active brands?

KKR is leading the debt financing and will also participate as a co-investor.

What is the strategic purpose of this acquisition for Galaxy Universal?

The acquisition aims to vertically integrate strong brands for better management of marketing, design, sales, and manufacturing, improving overall efficiency.