Back to Main

Iconix Closes $275M Notes Offering - Analyst Blog

Posted: 6/25/2013 12:31:00 PM
Referenced Stocks: BWS;HBI;ICON;NKE

Iconix Brand Group Inc. 's ( ICON ) subsidiaries have closed the notes offering aggregating $275 million under its existing securitization program. These notes carry an annual interest rate of 4.352% and will mature in 2020. Interest payments will be paid quarterly starting from Jul 25.

Initially, this clothing brand licensing company had announced an offering of $250 million notes. Iconix expects net proceeds from the note offering to be approximately $265 million. Its subsidiaries will use the proceeds for general corporate purposes, share repurchases, redemption of securities, acquisitions, working capital needs and capital expenditures.

Of late, Iconix has been aggressively acquiring brands and entering into joint ventures to strengthen its portfolio. Most recently, in May 2013, Iconix acquired the remaining 49% interest in IP Holdings Unltd LLC ("IPHU") that manufactures and markets fashion and lifestyle products in the U.S. and internationally. Iconix now owns brands such as Ecko Unltd. and Marc Ecko Cut & Sew. Iconix had previously acquired a 51% stake in IP Holdings Unltd LLC in 2009.

In Feb 2013, Iconix acquired the renowned lifestyle brand Lee Cooper for $72 million and a 51% stake in the Buffalo David Bitton brand for $76.5 million.  In Dec 2012, Iconix acquired the renowned football brand Umbro from Nike, Inc. ( NKE ) in order to further strengthen its portfolio with an iconic brand.

We remain impressed with Iconix's strategic acquisitions and consistent expansion of licensing agreements. Iconix expects to explore additional opportunities and enhance its portfolio with more iconic brands in the upcoming quarters. Iconix expects to deliver over 20% revenue and earnings per share growth for 2013.

Iconix holds a Zacks Rank #2 (Buy). Other stocks in the consumer discretionary sector that are worth considering include Brown Shoe Inc ( BWS ), which holds a Zacks Rank #1 (Strong Buy) and Hanesbrands Inc ( HBI ), which carries a Zacks Rank #2.

BROWN SHOE CO (BWS): Free Stock Analysis Report

HANESBRANDS INC (HBI): Free Stock Analysis Report

ICONIX BRAND GP (ICON): Free Stock Analysis Report

NIKE INC-B (NKE): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research