Surfing apparel brand Salt Life acquired by Iconix for $56 million
Iconix International Inc., partnering with liquidator Hilco Consumer-Retail Group, has bought the Salt Life apparel brand for US$38.7 million ($56.0 million) following Delta Apparel Inc.'s Chapter 11 bankruptcy filing in late June. The acquisition will see all 28 Salt Life stores close as the brand shifts to a wholesale and Ecommerce model.
Transaction snapshot
Deal value: US$38.7 million ($56.0 million)
Deal multiples: 0.66x revenue, 6.2x operating income
Deal type: Acquisition
Investors: Iconix International Inc. and Hilco Consumer-Retail Group
Iconix, whose brand portfolio includes Umbro, Pony, Starter, and Ocean Pacific, aims to expand into new areas like fishing, active watersports, hospitality, and food & beverage through this acquisition. Thread Collective has been named the new licensee for men's and women's apparel, with Iconix finalising other core licensees to quickly scale the brand.
This marks Iconix's second brand purchase in a year, following its majority stake acquisition in British streetwear brand Hoodrich last November.
Bob Galvin, CEO of Iconix International, said the Salt Life acquisition aligns with the company's investment criteria and strategic plan. He highlighted strong interest from partners and sees potential for rapid growth and global expansion.
In its last financial year ending 30 September, Delta Apparel reported Salt Life Group segment net sales of US$59.0 million ($85.2 million), down from US$60.0 million ($86.7 million) the previous year. The segment's operating income was US$6.2 million ($9.0 million), or 10.4% of sales, compared to US$8.2 million ($11.8 million), or 13.6% of sales, in the prior year.
Delta Apparel's bankruptcy filing included plans to sell certain Salt Life brand assets for about US$28.0 million ($40.4 million) to FCM Saltwater Holdings, the initial stalking horse bidder. However, Iconix and Hilco outbid them in the court-supervised auction.
In other developments from Delta Apparel's bankruptcy auction, Fanatics successfully bid nearly US$258,000 ($372,700) for 1,289,168 units of Fanatics blanks from the DTG2Go assets. Renfro LLC won the bid for Soffe brand assets at US$15.3 million ($22.1 million), narrowly beating NG Labs' US$15.1 million ($21.8 million) offer.
