Differential Brands Group Inc. (the Company) (NASDAQ:DFBG), a portfolio of global consumer brands comprised of Hudson, Robert Graham and SWIMS, today announced it successfully completed the acquisition (the Transaction) of a significant portion of Global Brands Group Holding Limiteds (Hong Kong listed: SEHK Stock Code: 787) (GBG) North American licensing business (the Acquired Business).
Design driven and product focused, the Acquired Business is anchored in category expertise spanning kids wear and womens and mens accessories and apparel. GBG licenses brands such as Calvin Klein, Under Armour, Tommy Hilfiger, BCBG, Joes, Buffalo David Bitton, Frye, Michael Kors, Kate Spade, All Saints and Cole Haan, and entertainment properties including Disney, Marvel and Nickelodeon, among others. The Transaction purchase price was USD $1.2 billion.
Concurrent with the closing of the Transaction, Differential Brands Group has changed its name to Centric Brands Inc. (Centric Brands), reflecting its position as a leading lifestyle brands collective platform. Centric Brands will be listed publicly on the NASDAQ under the ticker symbol CTRC, which is expected to be effective on or around November 1, 2018. Until that date, Centric Brands will continue to trade under the former symbol, DFBG. Jason Rabin, former President of GBG North America, will lead Centric Brands as Chief Executive Officer. William Sweedler, Managing Partner of Tengram Capital Partners LP (Tengram), which played a pivotal role in the Transaction, will continue to serve as Chairman of the Board of Directors (the Board).
Mr. Sweedler stated, With the closing of the acquisition and structuring of the new Centric Brands platform, we have brought together best-in-class operating capabilities with a strong portfolio of brands across areas of core expertise including kids wear, womens and mens accessories and apparel. Centric Brands looks forward to building its relationship with Li & Fung and its global sourcing networks. Mr. Sweedler continued, As a proven leader with nearly 25 years of industry experience, Jason will be able to seize the opportunities that lie ahead for Centric Brands in an impactful way that drives growth and creates long-term shareholder value.
The Centric Brands Board will be comprised of independent directors as well as Jason Rabin and appointees designated by Tengram and GSO Capital Partners LP (GSO Capital Partners). Rob Petrini, Senior Managing Director of GSO Capital Partners, who also played a key role in the Transaction stated, We are thrilled with the closing of this transformative deal and look forward to working with Jason and the Centric Brands management team, along with Tengram, to help support the Companys growth for years to come.
As a result of the Transaction, it is anticipated that Centric Brands will generate more than $2.3 billion in pro forma annual revenue with branded product distribution to a diversified base of consumers across all retail and digital channels. The new Centric Brands platform will allow the Company to seamlessly add new licenses and company-owned brands to its portfolio, leveraging its expertise and capabilities to design, produce, manage and market a broad array of products. The company will be headquartered in New York City with offices in Greensboro, Los Angeles, and Montreal.
Mr. Rabin stated, Im excited to have the opportunity to lead Centric Brands as we solidify our position in the market as a world class lifestyle brands collective. With the unmatched sourcing network of Li & Fung, industry expertise and a large-scale platform, we have the ability to expand organically through brand, category and channel growth, as well as the potential to add brands to our portfolio through new licenses and acquisitions across strategic verticals. I look forward to creating a culture of success at Centric Brands and to continuing to work with the Board to capitalize on the market opportunities ahead.
The purchase price for the Transaction was paid in cash. Fully committed debt financing for the Transaction was provided by affiliates of and/or funds managed by Ares Capital Management LLC, HPS Investment Partners, LLC, GSO Capital Partners LP and Blackstone Tactical Opportunities.
Upon the closing of the Transaction, Tengram and its affiliates converted all of its holdings of the Companys Series A and Series A-1 Convertible Preferred Stock into the Companys common stock.
Dechert LLP acted as lead counsel to the Company and Richards, Layton and Finger acted as Delaware counsel to the Company. Freshfields Bruckhaus Deringer LLP acted as lead counsel to GBG and Reed Smith LLP also advised GBG on the Transaction. Goldman Sachs (Asia) L.L.C. acted as financial advisor to GBG on the Transaction.
About Centric Brands:
Centric Brands (NASDAQ: CTRC) is a leading lifestyle brands collective, bringing together creative minds from the worlds of fashion and commerce, sourcing, technology, marketing and digital. We design, produce, manage and build kids wear and womens and mens accessories and apparel and distribute our products across all retail and digital channels in North America and in international markets. We also license over 100 brands across our core product categories including kids, womens and mens accessories and apparel. Our company-owned brands are Hudson, a designer and marketer of women’s and men’s premium, branded denim and apparel, Robert Graham, a sophisticated, eclectic apparel and accessories brand seeking to inspire a global movement, and SWIMS, a Scandinavian lifestyle brand best known for its range of fashion-forward, water-friendly footwear, apparel and accessories. We employ approximately 4,000 employees in offices in New York City, Greensboro, Los Angeles and Montreal, and in stores throughout North America. For more information, please visit Centric Brands website: www.centricbrands.com.
This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The matters discussed in this news release involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. All statements in this news release that are not purely historical facts are forward-looking statements, including statements containing the words may, will, expect, anticipate, intend, estimate, continue, believe, plan, project, will be, will continue, will likely result or similar expressions. Any forward-looking statement inherently involves risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to: the impact of the transaction on the Companys stock price; the anticipated benefits of the transaction on its financial results, business performance and product offerings, the Companys ability to successfully integrate GBGs business and realize cost savings and any other synergies; the risk that the credit ratings of the combined company or its subsidiaries may be different from what the Company expects; the risk of intense competition in the denim and premium lifestyle apparel industries; the risk that the Companys substantial indebtedness could adversely affect the Companys financial performance and impact the Companys ability to service its indebtedness; the risks associated with the Companys foreign sourcing of its products, including in light of potential changes in international trade relations and tariffs brought on by the current U.S. presidential administration; risks associated with the Companys third-party distribution system; continued acceptance of our product, product demand, competition, capital adequacy, general economic conditions and the potential inability to raise additional capital if required; the risk that the Company will be unsuccessful in gauging fashion trends and changing customer preferences; the risk that changes in general economic conditions, consumer confidence, or consumer spending patterns, including consumer demand for denim and premium lifestyle apparel, will have a negative impact on the Companys financial performance or strategies and the Companys ability to generate cash flows from its operations to service its indebtedness; the highly competitive nature of the Companys business in the United States and internationally and its dependence on consumer spending patterns, which are influenced by numerous other factors; the Companys ability to respond to the business environment and fashion trends; continued acceptance of the Companys brands in the marketplace; risks related to the Companys reliance on a small number of large customers; risks related to the Companys ability to implement successfully any growth or strategic plans; risks related to the Companys ability to manage the Companys inventory effectively; the risk of cyber-attacks and other system risks; risks related to the Companys ability to continue to have access on favorable terms to sufficient sources of liquidity necessary to fund ongoing cash requirements of the Companys operations or new acquisitions; risks related to the Companys ability to continue to have access on favorable terms to sufficient sources of liquidity necessary to fund ongoing cash requirements of its operations or new acquisitions; risks related to the Companys pledge of all its tangible and intangible assets as collateral under its financing agreements; risks related to the Companys ability to generate positive cash flow from operations; risks related to a possible oversupply of denim in the marketplace; and other risks. The Company discusses certain of these factors more fully in its additional filings with the SEC, including its annual report on Form 10-K for the fiscal year ended December 31, 2017 and subsequent quarterly reports on Form 10-Q filed with the SEC, and this release should be read in conjunction with those reports, together with all of the Companys other filings, including current reports on Form 8-K, through the date of this release. The Company urges you to consider all of these risks, uncertainties and other factors carefully in evaluating the forward-looking statements contained in this release.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Since the Company operates in a rapidly changing environment, new risk factors can arise and it is not possible for the Companys management to predict all such risk factors, nor can the Companys management assess the impact of all such risk factors on the Companys business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The Companys future results, performance or achievements could differ materially from those expressed or implied in these forward-looking statements. The Company does not undertake any obligation to publicly revise these forward-looking statements to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.
Dollar gains after three-day fall as risk rally takes a breather
By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – The dollar drifted higher on Friday after three straight days of losses, and riskier currencies fell, as bleak non-U.S. economic data gave global equity markets reason to pause after another week of record highs.
As a safe haven, the U.S. currency tends to rise in times of financial and economic stress that results in lower risk appetite.
The S&P 500 and the Dow along with U.S. Treasury yields were lower as well, suggesting a generally somber mood in financial markets.
The dollar did pare gains and riskier currencies cut losses earlier after upbeat U.S. economic data – a rise in factory activity to its highest in more than 13 years in January and an unexpected 0.7% gain in existing home sales.
The greenback had fallen against a basket of currencies for the past three sessions as market optimism about new U.S. President Joe Biden’s fiscal stimulus plans prompted traders to seek riskier assets, producing gains in currencies such as the New Zealand and Australian dollar.
But that trend paused on Friday, as market sentiment pulled back. Global shares slipped off record highs as the U.S. dollar steadied, up 0.1% on the day at 90.209.
The dollar index though still posted its biggest weekly loss since mid-December.
“There is some indecision in the marketplace and risk sentiment has been soured a little bit,” said Amo Sahota, executive director at currency advisory firm Klarity FX in San Francisco.
“The market has probably one eye on the Fed meeting next week, where they will likely throw a little bit more caution in the marketplace given the slower vaccine rollout and prolonged virus uplift globally.”
U.S coronavirus deaths have now reached nearly 410,000, with close to 25 million cases.
The Federal Reserve next week will hold its first monetary policy meeting of the year and strategists expect the Fed to stay dovish, and officials “will probably note signs of slowing in the economy since the December meeting,” NatWest Markets said in a research note.
Gloomy economic data also did little to brighten the mood, as UK data showed British retailers struggled to recover in December.
Economic activity in the euro zone shrank markedly in January as stringent lockdowns to contain the coronavirus pandemic hit the bloc’s dominant service industry hard.
In afternoon trading, the dollar rose 0.3% against the yen to 103.815.
Data from Japan overnight showed factory activity slipped into contraction in January and the services sector was more pessimistic as emergency measures to combat a COVID-19 resurgence dampened sentiment.
The Australian dollar fell after disappointing retail sales data, but still posted weekly gains. It was last down 0.6% at US$0.7718.
The New Zealand dollar was down around 0.6% at US$0.7179 versus the U.S. dollar.
The euro was little changed at $1.2167.
The single currency rose on Thursday after the European Central Bank’s policy rate announcement, with the ECB saying it might not need to use its full asset-purchase envelope.
The Norwegian crown, meanwhile, was hurt by lower commodity prices, slumping 1.1% against the dollar to 8.4940.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Mark Heinrich and Andrea Ricci)
UK body sets billion-pound budget for COVID financial firm collapses
By Huw Jones
LONDON (Reuters) – Britain’s scheme for compensating consumers hit by financial company failures has set itself a billion-pound ($1.37 billion) budget for the coming year to cope with a likely surge in collapses due to COVID-19.
The Financial Services Compensation Scheme’s (FSCS) budget of 1.04 billion pounds for the 2021/22 financial year that starts in April is its highest in six years.
The FSCS also said it would add 78 million pounds to the current year’s budget – a lower than expected increase – due to more firms failing, pushing the total for 2020/21 to 700 million pounds.
The body is responsible for compensation arrangements for the Financial Conduct Authority, which warned this month that around 4,000 financial firms in Britain were at “heightened risk” of collapsing due to fallout from the pandemic.
The FSCS, which is financed by a levy on financial firms, also expects more claims for complex pension advice, and further failures in operators of self-invested person pensions (SIPPS).
“In any other sector, a forecast for compensation of over one billion pounds would be the focus of national scandal,” said Tim Fassam, director of government relations and policy at PIMFA, a trade body for financial advisors.
“This is a further sign that the cost of compensation is truly out of control.” Reform is needed in how the FSCS is funded so that the “polluter pays”, Fassam added.
The FCA is already considering whether to force firms that give investors bad advice to foot the bill, rather than the current system of all firms chipping into a central pot.
“I hear and share concern that the cost of the levy is too high and the pressure this places on many firms,” said Caroline Rainbird, chief executive of the FSCS.
Apart from COVID-related failures, the FSCS also faces a potential bill to compensate 11,600 investors who lost 237 million pounds due to the collapse of the London Capital & Finance investment fund.
The FSCS is in talks with the finance ministry over compensation for LCF investors beyond what it has already paid out.
($1 = 0.7317 pounds)
(Reporting by Huw Jones; Editing by Jan Harvey)
Boeing says its fleet will be able to fly on 100% biofuel by 2030
By Eric M. Johnson
SEATTLE (Reuters) – Boeing Co said on Friday it will begin delivering commercial airplanes capable of flying on 100% biofuel by the end of the decade, calling reducing environmental damage from fossil fuels the “challenge of our lifetime.”
Boeing’s goal – which requires advances to jet systems, raising fuel-blending requirements, and safety certification by global regulators – is central to a broader industry target of slashing carbon emissions in half by 2050, the U.S. planemaker said.
“It’s a tremendous challenge, it’s the challenge of our lifetime,” Boeing Director of Sustainability Strategy Sean Newsum told Reuters. “Aviation is committed to doing its part to reduce its carbon footprint.”
Commercial flying currently accounts for about 2% of global carbon emissions and about 12% of transport emissions, according to data cited by the Air Transport Action Group (ATAG).
Boeing essentially has just a decade to reach its target because jetliners that enter service in 2030 will typically stay in service through 2050.
The world’s largest aerospace company must also confront the task hobbled by the coronavirus pandemic and the 20-month grounding of its best-selling jetliner after fatal crashes, which has strained its finances and engineering resources.
Boeing isn’t starting from scratch. In 2018, it staged the world’s first commercial airplane flight using 100% biofuel on a FedEx Corp 777 freighter.
Boeing and European rival Airbus SE also work on reducing carbon emissions through weight and drag reduction on new aircraft.
As it is now, biofuels are mixed directly with conventional jet fuel up to a 50/50 blend, which is the maximum allowed under current fuel specifications, Boeing said.
Boeing first must determine what changes to make to enable safe flight on alternative fuels derived from used vegetable oil, animal fats, sugar cane, waste and other sources.
Boeing needs to work with groups that set fuel specifications such ASTM International to raise the blending limit to allow expanded use, and then convince aviation regulators globally to certify the planes as safe, Boeing said.
(Reporting by Eric M. Johnson in Seattle; Editing by Aurora Ellis)
Dollar gains after three-day fall as risk rally takes a breather
By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) – The dollar drifted higher on Friday after three straight days of losses, and...
UK body sets billion-pound budget for COVID financial firm collapses
By Huw Jones LONDON (Reuters) – Britain’s scheme for compensating consumers hit by financial company failures has set itself a...
Boeing says its fleet will be able to fly on 100% biofuel by 2030
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European stocks sapped by weak economic data, travel curbs
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Energy, mining stocks weigh on British shares
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Muted recovery for UK retailers in December ends worst year on record
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Pay business insurance claims or face enforcement, UK watchdog says
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Turning corona corner, Volkswagen’s profit falls less than feared
BERLIN/LONDON/FRANKFURT (Reuters) – Volkswagen reported on Friday that its 2020 profit almost halved due to the impact of the pandemic,...