Sequential Brands Moves to Acquire Gaiam

By Chris Lange Updated Jan 13, 9:32AM EST · Published May 11, 11:35AM EDT

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Sequential Brands Moves to Acquire Gaiam — © Thinkstock

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.

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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.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.