Authentic Brands sell Equity Stakes and Defer IPO
Authentic Brands Group has recently sold significant equity stakes to investment firms CVC Capital Partners and HPS Investment Partners.
The deal, expected to close in December, values the brand licensing conglomerate at $12.7 billion and leaves BlackRock as its largest shareholder, as the firm has been since 2019, according to a press release.
With the new investors, Authentic Brands is delaying a planned initial public offering. “We pursued an IPO so that we could bring value to ABG and its shareholders,” a company spokesperson said in an email. “We are achieving exactly that with the onboarding of new equity partners.”
Authentic Brands who already own or co-owns businesses including Forever 21, Barneys New York, Nine West, Nautica, Brooks Brothers, Lucky, J.C. Penney and other brands, along with the rights to Elvis Presley, Muhammad Ali and other celebrity names, has recently sold significant equity stakes to investment firms CVC Capital Partners and HPS Investment Partners. The company also owns Sports Illustrated and earlier this year agreed to buy Reebok for $2.5 billion.
The investment deal is expected to close in December and will value ABG at $12.7 billion. As a result, Authentic Brands is delaying a planned initial public offering for at least two years.
“We are primed to continue furthering our global presence, acquiring new entertainment and lifestyle brands and driving organic growth for our portfolio,” Nick Woodhouse, president and chief marketing officer for Authentic Brands Group, said.
Authentic Brands CEO Jamie Salter commented, “We are brand owners, curators and guardians. We don’t manage stores, inventory, or supply chains. We don’t manufacture anything. We are a licensing business and are purely focused on brand identity and marketing.”
Its change of plans puts Authentic Brands in a position to keep growing and buying IP without the pressures and scrutiny of quarterly reporting. To the company, there is a $13 trillion market in branded commerce up for grabs. According to reports, Authentic has said it could enter consumer electronics, alcoholic beverages and other consumer categories in the future.