Differential Brands Group (NASDAQ:DFBG) shares were skyrocketing on the news that the company has entered into a definitive purchase agreement with Global Brands Group Holding Limited.
The agreement is to acquire a significant part of GBG’s North American licensing business that includes licensed brands such as Disney, Star Wars, Calvin Klein, Under Armour, Tommy Hilfiger, and Michael Kors for $1.38 billion in cash.
Shares closed up over 500% on the news and hit a brand new high.
William Sweedler, Chairman of the Board of Directors of Differential Brands Group, stated, “On behalf of the Board, I am thrilled that we were able to structure a transaction with the Fung family to acquire one of the leading branded consumer soft goods companies in North America with a world class management team led by Jason Rabin.”
Mr. Sweedler added, “Jason and his team plan to invest significant capital into this Transaction, which will transform Differential into a large scale North American branded platform.” Jason Rabin, current President of GBG North America stated, “We are thrilled to join Differential Brands Group (NASDAQ:DFBG) and lead our combined platform by leveraging our expansive infrastructure, distribution and sourcing networks to drive growth, and we look forward to working with the Differential management team and Tengram to help support the Company’s growth as it capitalizes on promising market opportunities. We are proud of what we have accomplished since joining Li & Fung in 2009, judiciously expanding the GBG platform and driving profitability, and thank them for their long-standing support and partnership.” Mr. Sweedler added, “Mr. Rabin has a proven track record of successfully growing numerous world class brands since inception. We are confident this Transaction will create tremendous value for our stockholders, as well as provide enhanced opportunities in North America for our brands and business partners.”
Mr. Sweedler is also the Managing Partner of Tengram Capital Partners LP which helped bring the parties together and get the transaction signed.
According to the company’s press release, the transaction is still “subject to satisfaction or waiver of customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, the approval of the GBG’s stockholders under applicable Hong Kong listing guidelines and the approval of DFBG’s (NASDAQ:DFBG) stockholders in connection with the Equity Issuance pursuant to NASDAQ listing requirements and regulatory approvals.”