Gaiam Inc. (NASDAQ: GAIA) and Sequential Brands Group Inc. (NASDAQ: SQBG) both announced a definitive agreement in which Gaiam will be acquired. The total purchase price in the acquisition is $146 million in cash.
As part of the transaction, Sequential will acquire Gaiam’s yoga, fitness and wellness product business, which includes the Gaiam and SPRI brands, with expansive distribution through Amazon, Kohl’s, Target and Bed Bath & Beyond, among other leading retailers and e-commerce channels in the United States and abroad. This bolt-on acquisition will seamlessly integrate into Sequential’s Active Division, which is currently anchored by the AND1 and AVIA brands.
In terms of guidance, Sequential Brands is raising its 12-month run rate production from $150 million to $155 million in revenue, up from the previous level of $92.5 million to $95.0 million. The consensus estimate from Thomson Reuters is $149.4 million in revenues at the end of 2016.
Yehuda Shmidman, CEO of Sequential, commented:
We believe this is a home run for Sequential. The acquisition is immediately accretive to earnings, and aligns with our long-term playbook of acquiring brands with significant, untapped potential where we can immediately unlock value and position them for long-term organic growth.
Lynn Powers, CEO of Gaiam, added:
The combination of GAIAM’s innovative products and authenticity in the active lifestyle space, coupled with Sequential’s extensive retail relationships and strategic approach to brand building sets the stage for taking both the brands to new levels. I am happy to be working with Sequential and the Fit For Life and High Life teams to ensure the culture of the GAIAM brands live on and grow.
Shares of Gaiam were trading up 17% at $7.86 on Wednesday, with a consensus analyst price target of $10.00 and a 52-week trading range of $4.35 to $8.00.
Sequential Brands was trading up about 13% at $6.55, with a consensus price target of $13.57 and a 52-week range of $5.37 to $18.59.
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
