NEW YORK, May 18, 2011 /PRNewswire/ -- Iconix Brand Group,
Inc. (Nasdaq: ICON) ("Iconix") announced today the pricing of its
private offering of $275 million
aggregate principal amount of 2.50% Convertible Senior Subordinated
Notes due 2016 (the "notes") to be sold to qualified institutional
buyers in reliance on Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act"). Iconix has granted the initial
purchasers of the notes a 30-day option to purchase up to an
additional $25 million aggregate
principal amount of notes, solely to cover over-allotments, if any.
The offering is expected to close on May 23,
2011, subject to certain closing conditions.
The notes will be Iconix's unsecured obligations, subordinated
in right of payment to existing and future secured senior
indebtedness. The notes will pay interest semi-annually in cash on
June 1 and December 1 at a rate of 2.50% per year,
commencing December 1, 2011. The
notes will mature on June 1, 2016.
The holders of the notes will have the ability to require Iconix to
repurchase all or any portion of their notes for cash in the event
of a fundamental change. In such case, the repurchase price would
be 100% of the principal amount of the notes being repurchased plus
any accrued and unpaid interest.
Prior to March 1, 2016, the notes
will be convertible only upon the occurrence of certain events and
during certain periods, and thereafter, at any time until the
business day preceding the maturity date of the notes. The notes
will be convertible at an initial conversion rate of 32.5169 shares
of Iconix common stock per $1,000
principal amount of the notes, which is equivalent to an initial
conversion price of approximately $30.75, which represents a 32.5% conversion
premium to the last sale price of $23.21 per share of Iconix common stock on the
NASDAQ on May 17, 2011. In addition,
following certain corporate transactions that occur prior to the
maturity date, Iconix will, in certain circumstances, increase the
conversion rate for a holder that elects to convert its notes in
connection with such corporate transaction. Upon any conversion,
Iconix's conversion obligation will be settled in cash up to the
principal amount and, to the extent of any excess over the
principal amount, in shares of Iconix common stock, or, if Iconix
so elects, cash.
In connection with the offering of the notes, Iconix has entered
into privately negotiated convertible note hedge transactions with
one or more dealers, each of whom is an initial purchaser of the
notes or an affiliate thereof (the "hedge counterparties"). The
convertible note hedge transactions will cover, subject to
customary anti-dilution adjustments, the number of shares of Iconix
common stock that will initially underlie the notes. Iconix
has also entered into separate privately negotiated warrant
transactions with the hedge counterparties relating to the same
number of shares of Iconix common stock. The strike price of
the warrant transactions will initially be approximately
$40.6175 per share, which represents
a 75.0% premium to the last sale price of Iconix common stock on
the NASDAQ on May 17, 2011. In
addition, if the initial purchasers exercise their over-allotment
option to purchase additional notes, Iconix expects to sell
additional warrants and to use a portion of the proceeds from the
sale of the additional notes and from the sale of the corresponding
additional warrants to enter into additional convertible note hedge
transactions. The convertible note hedge transactions are
expected to reduce the potential dilution with respect to Iconix
common stock upon conversion of the notes. However, the
warrant transactions will have a dilutive effect with respect to
Iconix common stock to the extent that the market price per share
of Iconix common stock exceeds the applicable strike price of the
warrants on any expiration date of the warrants.
In connection with establishing their initial hedges of the
convertible note hedge transactions and warrant transactions and
concurrently with, or shortly after, the pricing of the notes, the
hedge counterparties and/or their affiliates expect to purchase
Iconix common stock in open market transactions and/or privately
negotiated transactions and/or enter into various cash-settled
derivative transactions with respect to Iconix common stock. In
addition, the hedge counterparties and/or their affiliates may
modify their hedge positions by entering into or unwinding various
derivative transactions with respect to Iconix common stock and/or
by purchasing or selling Iconix common stock in open market
transactions and/or privately negotiated transactions following the
pricing of the notes from time to time (and are likely to do so
during any conversion period related to a conversion of notes). Any
of these hedging activities could also increase, decrease or
prevent a decline in, the market price of Iconix common stock.
Iconix estimates that the net proceeds from the offering of the
notes will be approximately $268.1
million (or approximately $292.5
million if the initial purchasers exercise their
over-allotment option in full), after deducting the initial
purchasers' fees, but excluding offering expenses. In
addition, Iconix expects to receive proceeds from the sale of the
warrants described above. Iconix expects to use the net
proceeds from the offering of the notes (i) to fund the net cost of
a convertible note hedge transaction with hedge counterparties,
(ii) to prepay the outstanding balance of indebtedness under its
term loan facility due January 1,
2012 within 90 days after the closing of the offering, (iii)
to make future repayment on the existing convertible senior
subordinated notes, which may be on or prior to the maturity date
thereof, and (iv) for general corporate purposes, which may
include, but are not limited to, investing in or acquiring new
brands through opportunistic mergers, stock or asset purchases
and/or other strategic relationships, although there are no present
commitments or agreements with respect to any such investments or
acquisitions.
The notes and the shares of Iconix common stock issuable upon
conversion thereof, if any, have not been registered under the
Securities Act or applicable state securities laws and may not be
offered or sold in the United
States except pursuant to an exemption from the registration
requirements of the Securities Act and applicable state securities
laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
About Iconix Brand Group, Inc: Iconix Brand Group, Inc.
owns, licenses and markets a growing portfolio of consumer brands
including CANDIE'S (R), BONGO (R), BADGLEY
MISCHKA (R), JOE BOXER (R),
RAMPAGE (R), MUDD (R), LONDON FOG (R), MOSSIMO (R), OCEAN
PACIFIC(R), DANSKIN (R), ROCA WEAR(R), CANNON (R), ROYAL VELVET
(R), FIELDCREST (R), CHARISMA (R), STARTER (R) and WAVERLY (R). In addition, Iconix owns an
interest in the ARTFUL DODGER (R), ED
HARDY (R), ECKO (R), MARC
ECKO (R), ZOO YORK (R), MATERIAL GIRL (TM) and PEANUTS (R)
brands. Iconix licenses its brands to a network of leading
retailers, wholesalers and manufacturers that touch every major
segment of retail distribution from the luxury market to the mass
market in both the U.S. and worldwide. Through its in-house
business development, merchandising, advertising and public
relations departments Iconix manages its brands to drive greater
consumer awareness and equity.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995. The statements that are not historical facts
contained in this press release are forward-looking statements that
involve a number of known and unknown risks, uncertainties and
other factors, all of which are difficult or impossible to predict
and many of which are beyond the control of Iconix, which may cause
the actual results, performance or achievements of Iconix to be
materially different from any future results, performance or
achievements expressed or implied by such forward looking
statements. Such factors include, but are not limited to,
uncertainty regarding the results of Iconix 's acquisition of
additional licenses, continued market acceptance of current
products and the ability to successfully develop and market new
products particularly in light of rapidly changing fashion trends,
the impact of supply and manufacturing constraints or difficulties
relating to Iconix's licensees' dependence on foreign manufacturers
and suppliers, uncertainties relating to customer plans and
commitments, the ability of licensees to successfully market and
sell branded products, competition, uncertainties relating to
economic conditions in the markets in which Iconix operates, the
ability to hire and retain key personnel, the ability to obtain
capital if required, the risks of litigation and regulatory
proceedings, the risks of uncertainty of trademark protection, the
uncertainty of marketing and licensing acquired trademarks and
other risks detailed in Iconix's SEC filings. The words "believe",
"anticipate", "estimate", "expect", "confident", "continue",
"will", "project", "provide" "guidance" and similar expressions
identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward looking statements, which
speak only as of the date the statement was made. All
forward-looking statements are qualified by these cautionary
statements and apply only as of the date they are made.
Iconix undertakes no obligation to update any forward-looking
statement, whether as a result of new information, future events or
otherwise.
Contact:
Jaime Sheinheit
Investor Relations
Iconix Brand Group, Inc.
212.819.2096/jsheinheit@iconixbrand.com
SOURCE Iconix Brand Group, Inc.