Iconix Brand Group, Inc. ( ICON ) has announced
to offer convertible senior subordinated notes worth $325 million
due 2018 only to qualified institutional buyers, subject to market
conditions. In case of any over-allotments, Iconix will offer the
initial purchaser of the notes up to an additional $50 million
aggregate principal amount of notes within 30 days. The notes will
mature on Mar 15, 2018.
Iconix expects to utilize the net proceeds to repurchase up to
$75 million of its common stock in privately-negotiated
transactions, to fund the net cost of a convertible note hedge
transaction and a warrant transaction, and for general corporate
purposes, such as investments or acquisition of new brands or
additional share repurchases.
Since Jan 1, 2013, Iconix has repurchased approximately 2.6
million shares for approximately $62.0 million. Last month, Iconix
reported its fourth quarter results and announced a new share
repurchase program to repurchase up to $300 million of its common
stock over a three-year period, in anticipation of full use of the
$200 million share repurchase program, which was authorized in Oct
Iconix has a diversified portfolio of brands. Iconix builds its
brand portfolio by acquiring new brands, entering into joint
ventures or other partnerships, each of which enhances the
company's brand management expertise and existing
Most recently in February, Iconix acquired the renowned
lifestyle brand Lee Cooper for $72 million to strengthen its brand
portfolio and to expand in important international markets, which
now account for 33% of its overall business.
Iconix has also formed a joint venture with Buffalo
International ULC to acquire a 51% interest in the latter's Buffalo
David Bitton brand for $76.5 million, which will help Iconix to
expand its retail footprint in the U.S. and Canada. Again, in
early-Dec 2012, the company added sports apparel and footwear
brand, Umbro from its peer Nike Inc. ( NKE ) to further
strengthen its diversified portfolio.
Currently the stock carries a Zacks Rank #3 (Hold). Other
favorable stocks in the consumer discretionary sector worth
considering are Skechers USA Inc ( SKX ) and
Michael Kors Holdings Ltd ( KORS ), both of them
holding a Zacks Rank #1 (Strong Buy).ICONIX BRAND GP (ICON): Free Stock Analysis
ReportMICHAEL KORS (KORS): Free Stock Analysis ReportNIKE INC-B (NKE): Free Stock Analysis ReportSKECHERS USA-A (SKX): Free Stock Analysis
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