Sequential Brands Group Inc. has signed a definitive agreement to sell the rights to the Martha Stewart and Emeril Lagasse brands and related intellectual property assets to Marquee Brands LLC for an estimated $175 million with an earnout opportunity of up to an additional $40 million.
“This transaction allows Sequential to make meaningful progress in de-levering our balance sheet, which is a top priority,” said Karen Murray, CEO of Sequential Brands Group. “This process was conducted after careful consideration by our Board of Directors and advisors. While we have made significant progress with the Martha Stewart and Emeril Lagasse brands, we determined the best direction for the company going forward is to focus on our core active and fashion brands and drive even more profitable growth across our business. I have confidence that the Martha Stewart and Emeril Lagasse brands will continue to flourish under new ownership as they build on what we have accomplished to date. We thank Martha for her support of Sequential and this transaction.”
The company plans to use a substantial portion of the proceeds from the transaction to pay down debt. Sequential Brands Group Chairman William Sweedler commented, “This transaction gives us financial and operating flexibility and streamlines our business around core brands with the highest margins and attractive growth prospects. I believe this new focus will generate greater shareholder value.”
The transaction is expected to close in the second quarter of 2019. After it closes, the company will provide more details including an updated financial outlook for 2019. In conjunction with the transaction, the company anticipates additional cost reductions including the sublease of its current corporate headquarters.
As part of the process, Tengram Capital Partners along with Barron International Group LLC served as advisors to the Company, and Gibson, Dunn & Crutcher LLP acted as its legal counsel. Houlihan Lokey provided a fairness opinion to Sequential's Board of Directors. Stewart was represented by Grubman Shire Meiselas & Sacks.
