Iconix Brand Group Inc., owner of fashion brands including Joe Boxer and Candie's, said it agreed to buy the Rocawear brand for $204 million in cash, to boost its holdings of fashionable attire and accessory brands.The licensing and brand management company, in a statement, said it expects Rocawear to generate about $43 million in royalty revenue in the first 12 months under its fold.
Rocawear, which was co-founded by Shawn Carter, the hip hop artist known as Jay-Z, has annual sales of over $700 million.
The Rocawear acquisition, the largest deal Iconix has done, will be funded from proceeds of a loan made to the company by one or more affiliates of Lehman Brothers Inc., and is expected to close in March.
As part of the deal, Iconix will also enter into a separate joint venture with Jay Z, to establish a new brand management and licensing company to identify brands to be acquired or developed.
Jay Z will continue to be chief creative officer of the Rocawear brand, Iconix said.
He will retain his stake in the operating company and his two partners, Alex Bize and Norton Cher, will continue to run the company and enter into a long-term license agreement with Iconix for the core young men's apparel category.
Revenue is expected to be $150 million to $160 million in 2007, the company said while announcing quarterly results.
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