Acquisition expected to add $22 million in revenue for Sequential Brands.
Sequential Brands Group has agreed to acquire Gaiam for approximately $146 million in cash.
As part of the transaction, Sequential will acquire Gaiam’s yoga, fitness and wellness product business, which include the Gaiam and Spri brands. The acquisition will integrate into Sequential’s active division, which is currently anchored by the And1 and Avia brands.
According to Sequential, the purchase is expected to add approximately $22 million in revenue and $20 million of adjusted EBITDA on a full year run rate basis. Post closing, Sequential’s total guaranteed minimum royalties are expected to increase from approximately $360 million to more than $500 million.
“We believe this is a home run for Sequential,” says Yehuda Shmidman, chief executive officer, 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.”
Sequential has also signed long-term licensing agreements with Fit for Life and High Life for the Gaiam’s core categories, which will become effective upon closing. Fit for Life will be the licensing partner for hard goods and equipment categories, as well as the digital properties; while High Life will be the licensing partner for Gaiam’s yoga and athleisure apparel business.
“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,” says Lynn Powers, chief executive officer, Gaiam. “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.”