Iconix Brand Group has signed a definitive agreement with United Features Syndicate and The E.W. Scripps Company to acquire the Peanuts brand and related assets in partnership with the Schulz family. As part of the transaction, Iconix will also acquire the licensing and character representation business of United Media Licensing, a division of UFS, which, in addition to Peanuts, represents a number of character brands, including Dilbert and Fancy Nancy. The Peanuts brand and other acquired assets will be purchased through a newly formed subsidiary, which will be owned 80% by Iconix and 20% by the Schulz family.
The cast of Peanuts, includes, among others, iconic and well known characters such as Charlie Brown, Snoopy, Lucy, Linus, Sally, Schroeder, Peppermint Patty and Woodstock. Peanuts has a strong diversified global licensing platform with over 1,200 licensing agreements including relationships with MetLife, Hallmark, Universal Studios, Warner Bros., Cedar Fair, H&M, Benetton, Old Navy, CVS and Walgreens. The Peanuts brand is licensed in over 40 countries and generates annual retail sales of over $2 billion.
The total purchase price for this acquisition is approximately $175 million of which Iconix will pay for its 80% share and the Schulz family will pay for its 20% share. Iconix portion will be funded from the Company’s existing cash balance.
On a pro-forma basis the Company expects Peanuts to generate approximately $75 million in annual royalty revenue and add approximately $0.12-$0.15 in annual EPS. Different from a typical Iconix acquisition, the costs associated with the Peanuts business will be higher than the Company’s existing brands as there is an existing contractual revenue share with the Schulz heirs, which is separate from the family’s 20% interest in the new partnership. There are also agent commissions and additional administrative costs associated with managing over 1,200 contracts around the world. Initially, EBITDA margins for this business are expected to be in a range of approximately 20%-25%. In 2010, the accretion will be impacted by deal costs and will depend on the timing of the close.
Location: USA, New York, NY
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