Item
2.01
Completion
of Acquisition or Disposition of Assets.
On
October 3, 2007 (the “Closing Date”), Iconix Brand Group, Inc., a Delaware
corporation (the “Registrant”), completed its acquisition of all of the issued
and outstanding limited liability company interests (the “Company Interests”) of
the
Official
Pillowtex LLC, a Delaware limited liability company (the “Company”),
from
the
owners of such Company Interests pursuant to a purchase and sale agreement
(the
“Purchase Agreement”) dated September 6, 2007 by and among the Registrant, the
Company
and the
Company’s members
;
Jubilee
Limited Partnership, an Ohio limited partnership, Gordon Brothers Retail
Partners, LLC, a Delaware limited liability company, Tiger PTX IP, LLC, a
Delaware limited liability company, BFG PTX Group, LLC, a Delaware limited
liability company, CCA Towels, LLC, a New York limited liability company, Franco
44 PT, LLC, a New York limited liability company, High Street Holdings, LLC,
a
Delaware limited liability company, Solwerd Enterprises, LLC, a Delaware limited
liability company, and Mazel D & K, LLC, an Ohio limited liability company
(collectively,
the “Sellers”)
.
The
Company is the owner of a portfolio of home brands including four primary
brands, Cannon, Royal Velvet, Fieldcrest and Charisma and numerous others home
brands including St. Mary's and Santa Cruz.
The
closing of this transaction occurred following the early termination of the
statutory waiting period required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
In
accordance with the terms of the Purchase Agreement, on the Closing Date, the
Registrant paid an aggregate of approximately $231,000,000 in cash, which is
subject to adjustment to reflect certain prepaid royalties and royalties
receivable, as the purchase price for the Company Interests, of which (i)
approximately $207,000,000 was paid to the Sellers by the Registrant, (ii)
$15,000,000,
together
with any interest and any other income earned
thereon,
was released to the Sellers by U.S. Bank National Association (the “Escrow
Agent”) in accordance with the escrow agreement dated September 6, 2007 (the
“Escrow Agreement”) by and among the Registrant, the Company and the Escrow
Agent, and (iii) $9,000,000,
together
with any interest and any other income earned
thereon,
will be paid to the Sellers by the Escrow Agent on the twelve (12) month
anniversary of the Closing Date, less any amounts due to the Registrant pursuant
to the Sellers’ indemnification obligations to the Registrant for breaches of
the Sellers’ representations, warranties, covenants and obligations made under
the Purchase Agreement.
In
addition, in accordance with the terms of the Purchase Agreement, the Sellers
were granted a contingent right to receive aggregate additional payments of
up
to $15,000,000 in cash, based upon the Company brands surpassing specific
revenue targets.
The
description of the Purchase Agreement and the Escrow Agreement (the “Transaction
Documents”) do not purport to be complete and are qualified in their entirety by
reference to the full text of such documents, which are filed as exhibits to
this Report. The Transaction Documents have been included to provide investors
and security holders with information regarding their terms. They are not
intended to provide any other factual information about the Registrant or the
other parties thereto. The Transaction Documents contain representations and
warranties the parties thereto made to, and solely for the benefit of, the
other
parties thereto. Accordingly, investors and security holders should not rely
on
the representations and warranties as characterizations of the actual state
of
facts, since they were only made as of the date of such agreements. In addition,
the Purchase Agreement is modified by the underlying disclosure
schedules. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of such agreements,
which subsequent information may or may not be fully reflected in the
Registrant's public disclosures.