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Cherokee to Acquire Hi-Tec Sports

Cherokee Global Brands has announced that it intends to acquire the global footwear company Hi-Tec Sports International.

April 6, 2018

2 Min Read

Acquisition will add approximately $19 million in licensing revenue in the first full fiscal year.

Cherokee Global Brands has announced that it intends to acquire the global footwear company Hi-Tec Sports International.

Upon closing of the transaction, Cherokee will sell substantially all assets related to Hi-Tec’s wholesale operations to new operating partners, which will fund a portion of the Hi-Tec acquisition price. Simultaneously, the new operating partner licensees will enter into license agreements with Hi-Tec Sports, converting the company into a branded licensing model that is consistent with Cherokee’s strategy.

Cherokee also expects Hi-Tec to contribute approximately $19 million in licensing revenue and $7 million in adjusted EBITDA during the first fiscal year after the closing of the acquisition.

“The acquisition of the Hi-Tec and Magnum brands aligns with our strategic focus of diversifying and building upon our active lifestyle portfolio as we continue to grow our global footprint,” says Henry Stupp, chief executive officer, Cherokee Global Brands. “Hi-Tec’s high-equity brands will build upon our presence in the active, outdoor markets, and we are excited by the potential to further expand these brands into additional categories including apparel, accessories, wearables, outdoor products and more.”

Additionally, the acquisition will be effected by a share purchase agreement where Cherokee will acquire all the issued and outstanding share capital of Hi-Tec Sports for an aggregate cash purchase price of approximately $95.8 million on a cash-free, debt-free basis. Following post-closing adjustments, asset sales and other transactions, the company expects that the purchase will be approximately $62 million.

NIBC Bank is acting as the exclusive financial advisor to Hi-Tec. Meanwhile, Houlihan Lokey and Symphony Investment Partners are acting as financial advisors to Cherokee.

Both companies expect the transaction to close in the current fiscal quarter, ending Jan. 28, 2017.

“This is an exciting time, and we are pleased to join Cherokee Global Brands,” says Ed Van Wezel, chief executive officer, Hi-Tec. “Cherokee Global Brands has built a compelling global platform, that combined with the new brand licensing model will allow us to adapt to the fast-changing retail and consumer environment, broaden the reach and offering of Hi-Tec’s core brands while we build upon our select distribution channels that have been established over the past 40 years. I look forward to working directly with Henry Stupp and the Cherokee Global Brand’s team. We look forward to making Hi-Tec’s products available to an even broader global customer base, as we expand our existing relationships through new product category introductions.”

Founded in 1974 and based in the Netherlands, Hi-Tec is a branded footwear company that designs, markets and sells footwear globally, primarily under the Hi-Tec and Magnum brands. Its brands are currently sold in more than 110 countries, including predominantly in the U.K., continental Europe, the U.S., Canada, South and Central America and Asia.

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