Gali Koval is a luxury men's clothing brand that has filed for Chapter 11 bankruptcy. This document analyzes strategic alternatives to maximize the value of the business, including a sale to a larger strategic buyer or private equity firm. Under a sale to a strategic buyer, the valuation range is estimated at $346 million to $434 million, or $447 million to $613 million if synergies are realized. A sale to a private equity buyer pursuing new sales channels could realize $655 million to $841 million.
New Energy Systems Group is a vertically integrated original design manufacturer and distributor of lithium ion batteries and backup power systems for mobile phones, laptops, digital cameras, MP3s and a variety of other portable electronics. The company's end-user consumer products are sold under the Anytone brand in China, and the company has begun expanding its international sales efforts. The fast pace of new mobile device introductions in China combined with a growing middle class make it fertile ground for New Energy's end-user consumer products as well as its high-powered, lightweight lithium ion batteries. In addition to historically strong organic growth, New Energy anticipates that it will benefit from economies of scale, broader distribution, greater production capacity and higher profit margins in 2010. Additional information about the company is available at: http://www.newenergysystemsgroup.com .
This document brings together a set
of latest data points and publicly
available information relevant for
Technology Industry. We are very
excited to share this content and
believe that readers will benefit from
this periodic publication immensely.
New Energy Systems Group is a vertically integrated original design manufacturer and distributor of lithium ion batteries and backup power systems for mobile phones, laptops, digital cameras, MP3s and a variety of other portable electronics. The company's end-user consumer products are sold under the Anytone brand in China, and the company has begun expanding its international sales efforts. The fast pace of new mobile device introductions in China combined with a growing middle class make it fertile ground for New Energy's end-user consumer products as well as its high-powered, lightweight lithium ion batteries. In addition to historically strong organic growth, New Energy anticipates that it will benefit from economies of scale, broader distribution, greater production capacity and higher profit margins in 2010. Additional information about the company is available at: http://www.newenergysystemsgroup.com .
This document brings together a set
of latest data points and publicly
available information relevant for
Technology Industry. We are very
excited to share this content and
believe that readers will benefit from
this periodic publication immensely.
4. Executive Summary
• Motivation for Reemergence:
• July 2012, principal on the company‟s debt came due
• Defaulted on principle payments and unable to refinance
• Currently in Chapter 11 receivership
• Company equity holders proposed a plan for reemergence
• Rejected by bankruptcy court
• Debt holders have taken control of the company
• Set to propose a plan for exit since they have no interest in continuing business
• Alternatives to Maximize Value of Business:
• 1. Gali Koval sold to larger industry peers such as PVH Corporation or
LVMH Group
• Conservative sale range of $346MM to $434MM, or an optimistic range of
$447MM to $613MM with synergies
• 2. Gali Koval sold to a private equity buyer to expand new sales channels
• Realizable transaction consideration between $655MM to $841MM
6. Business Description
• Gali Koval Corporation engages in sales of men‟s clothing and luxury
products
• Headquarted in New York, NY
• Operates 99 stores and distributes to upscale department stores
• Has direct sales channels in all major U.S markets, small international presence and
meaningful online sales
• 10 stores in Europe and Asia
• Sourced from independent manufacturers
• Most manufacturing takes place outside the U.S
• Workforce approximately 3,500 employees
• Experience senior management team
• Gali Koval is known for high quality product and commands a premium price
• All products are branded with “Gali Koval” trademark
• Brand name maintained luxury image, worn by celebrities and high profile
executives
• Gali Koval does not currently license its brands to third parties
8. Gali Koval Overview
• 2007: Gali Koval acquired by private equity firm for $1.1 billion
• Acquisition funded with 65% debt and 35% equity
• Believed there was an opportunity to expand international operations and sales
• Attempted to expand internationally in 2008 and 2009, but has since closed some of these new outlets
• 2009: Gali Koval lost a large department store customer
• Due to disagreements about pricing and marketing strategy
• Since global recession in 2008-2009, luxury brands have seen performance
suffer
Revenue:
• Plummeted sharply during Revenue (‘000s) & Margin
financial crisis Trends
• Has recently stabilized, but results
continue to be below 2007 levels
EBITDA:
• Margin reduction in recent years is
mainly a result of significant lost
revenues
• Company‟s cost cutting efforts
have not kept pace with declines
in revenue
10. Industry History
2010 2011
• Consumer Spending on Apparel • Consumer Spending on Apparel
• $191.3 billion • Increase of 3.8% from 2010: $198.7 billion
• Disposable Personal Income • Disposable Personal Income
• Increased 3.6% (0.7% in 2009) • Increased to 3.8% from 2010
• Imported Apparel • Imported Apparel
• $71.40 billion • Increase of 8.8% from 2010: $77.66 billion
• Exports of U.S-Made Clothing • Exports of US-Made Clothing
• $4.51 billion • Increase of 13.7% from 2010: $5.13 billion
• US Retail Sales • US Retail Sales
• $219.23 billion • Increase of 5.9% from 2010: $226.52
• Men‟s Apparel Retail Sales • Men‟s Apparel Retail Sales
• Accounted for 28% of US Retail Sales • Accounted for 28% of US Retail Sales
Source: Standard & Poor‟s Industry Surveys-Apparel & Footwear: Retailers and Brands
11. Industry Background Forecasts
• Overview-Post Financial Crisis
• Expected unemployment rate of 8.2% with continued improvement through 2015, project a rate of 7.0%
• Change in spending and savings patterns
• More responsible/constrained consumer will force the sector to adjust lower sustainable levels of demand
• Will lead investors to lower their long-term secular growth expectation
• Recession sharpened the consumer‟s value focused and increased the retailer consideration set by 4%*
• GDP grew 1.3% in second quarter of 2012, projected 2.2% growth for end of 2012
• Luxury Goods Market
• Bain & Co. estimated worldwide sales growth for luxury goods will be between 6%-7%
• Highest growth would come from Asia (excluding Japan) at 16.5%, Americas (5%-7%) and Europe (3.75%)
• Within emerging markets, sales forecasted to increases 18%-22% in China, 14% in Latin America, and 8.75% in
the Middle East
Consumer Spending (2011)
Apparel
5% 3% Food
8%
Other durables
7% Cars
20%
4% Energy
Other services
6%
Recreation and travel services
15% Restaurants
Housing
22%
5% 5% Health Care
Other Nondurables
Source: Standard & Poor‟s Industry Surveys-Apparel & Footwear: Retailers and Brands
13. Trading Comparables
• Comparable companies consist of publicly traded companies in the Apparel
Industry
• They have similar products, business models, and growth to Gali Koval
• Tend to be slightly larger as smaller companies have greater difficulty adhering to the high compliance costs
of being publicly traded
• EV/EBITDA multiples imply a valuation range of $202MM to $430MM
• Median multiple of 5.9x leads an implied valuation of $282MM
14. Transaction Comparables
• Comparables consist of six acquisitions within the Apparel Industry
• Includes two strategic acquisitions and four leverage buyouts
• All transactions in cash
• Gali Koval should pursue similar deal structure to receive immediate payment
• EV/EBITDA multiple implies a valuation range of $330MM to $590MM
• Median multiple of 8.0x results in an implied valuation of $385MM
15. Financial Projections
• 2013-2016 Assumptions:
• Management plan used as given
• Net Working Capital (NWC) in 2012: $87.917M
• NWC= Current Asset – Current Liabilities + Current Portion of Debt
• Company was taken over by debt holders and no current debt is accounted
• Projections of NWC for 2013-2016: 26.6%
• Will be held constant with 2012 percentage of revenue
• 2017 Assumptions:
• Revenue growth percentage from 2016 will be held constant
• Company Owned Stores: 4.8%
• Department Stores: 2.5%
• Online Stores: 10%
• Expenses (as a percentage of revenue) held constant
• COGS: 40%
• SG&A: 39.5%
• Depreciation held constant at 2.6% of revenue
• Capital Expenditures held constant at 2.5% of revenue
• NWC held constant at historical percentage of 26.6% of revenue
• Post 2017 Assumptions:
• Unlevered Free Cash Flow to firm will grow 2.0% in perpetuity
17. WACC Calculations
• Weighted Average Cost of Capital calculation based on several underlying assumptions
from publicly available sources and industry research
• Cost of Debt: 8.99%
• Implied CCC credit rating based on Standard & Poor‟s Indicative Ratios for measuring financial risk
• Yield on 20 yr. Corporate Bond at CCC rating is 8.99%
• Cost of Equity (as determined by CAPM): 12.09%
• Equity Risk Premium: 8.23%1
• Risk Free Rate: 2.02%2
• Beta: 1.22
• Un-levered Beta of Apparel Industry: 1.053
• Tax Rate: 35.0%
• Book Value of Debt to Market Capitalization Ratio : 26.20%3
• Unique Risk Premium of 3.0% is added due to the situation that Gali Koval is in bankruptcy
• Calculated WACC Value: 13.79%
Sources: 1. Bloomberg Terminal indicates Market Return on US Equity 10.25%, effective January 2013
2. Using 20 yr. treasury yield as proxy, quoted from US Department of Treasury, January 2013
3. Assumed BV of Debt = MV of Debt; thus, BV of Debt to MV of Equity is a reasonable proxy for MV of Debt to MV of Equity
18. Discounted Cash Flow
• Discounted Cash Flows Analysis projected financial statements
• Calculated WACC of 13.79%, and assumed Terminal Growth Rate of 2.0%
• Results in intrinsic value of $315MM
• Implied valuation range of $282MM to $358MM
20. DCF with Synergies
• If Gali Koval Corporation is purchased by a strategic buyer, it could
anticipate a premium over the intrinsic valuation due to revenue and
cost synergies from scalability
• Synergy Assumptions:
• Revenue
• $14MM revenue synergies in 2013, increases $2MM/yr. until reaching $20MM in
2016, revenue synergies in 2017 held constant as 2016
• $7.5MM/yr. of lost revenue due to store closings
• Gross Margin
• Will remain the same level as percentage of revenue as outlined in financial statement
projections
• Gross Margin is projected at 60% of revenue and the industry average of about 51%1
• Synergies won‟t have any improvement in Gross Margin
• SG&A cost savings
• $8MM/yr. cost savings due to store closings
• $25MM one time cost reduction due to distribution center rationalization in 2013
• $3MM one time expense due to store closings in 2013
• $10MM one time saving through management and back office reductions in 2013
• Depreciation, Capital Expenditures, and Net Working Capital will remain at
stated percentage of revenue as outlined in financial statement projections
Sources: 1. Bloomberg Terminal
21. DCF with Synergies
• Discounted Cash Flow Analysis from projected realizable
synergies, calculated WACC of 13.79%, and terminal growth rate of
2.0%
• Results in intrinsic valuation with synergies of $384MM, assuming all
synergies are realized
• Implied valuation with synergies from $346MM to $434MM
• It‟s possible that after being acquired by a healthy strategic
buyer, Gali Koval‟s WACC will return back to the industry average and
no unique risk premium related to bankruptcy will need to be added
• In this case, WACC=10.79%
• Results an optimistic intrinsic value with synergies range of $447MM -
$613MM
24. Leverage Buyout
• A private equity buyer will pursue a different strategy to expand revenue
after acquiring Gali Koval
• A new line of products at a lower price point will be sold through mainstream
department stores and retail outlets
• Financial Projections:
• Revenue
• $7.5MM/yr. reduction at company owned stores due to store closings
• Strategy of selling in new channels will result in a revenue of $103.2MM and grow at a rate of 20%
until reaching $225MM in 2016
• Growth rate in 2017 will drop to 5% after a rapid growth period
• 12.5% of 2012 level revenue from upscale department stores will be lost every year beginning in
2012 until reaching half of 2012 level in 2016
• 2017 will be held constant as 2016
• Gross Margin
• Remain flat at a percentage of 58.3% (2012 level) of revenue
• SG&A
• $3MM one time expense due to store closings in 2013
• SG&A (excluding savings from store closings) as a percentage of revenue will decrease 150bps
each year until 2016
• 2017 will hold at a constant rate as 2016
• $8MM/yr. cost savings due to store closings
• Depreciation, Capital Expenditures, and Net Working Capital will remain at stated
percentage of revenue as outline in financial statement projections
25. Leverage Buyout
• Financial Structure Assumptions:
• Purchase price of $700MM
• Require IRR of 20.0%
• Senior Debt of 4.0x 2012A EBITDA, Subordinated Debt of 7.0x 2012 A EBITDA
• Cost of Senior Debt is 2.8% (3-month LIBOR+250bps)1
• Cost of Subordinated Debt is 5.1% (3-month LIBOR+480bps)1
• No debt exists at the time of deal since company was taken over
• Exit multiple of 7.0x, 1.0x lower than the median of comparable transactions due to
company‟s bankruptcy situation
Sources: 1. Bloomberg Terminal
26. Leverage Buyout
• Return Analysis
• Valuation range of $655MM to $841MM
• Assuming financial sponsor must ensure 20.0% IRR, it would be limited to paying $733MM
• Attractiveness of Leverage Buyout
• Stable cash flows allow for consistent debt repayment and potential for future profitable growth
• The opportunity to expand through new channels will substantially increase Gali Koval‟s revenue
• Acquirer will offer strong financial support for new market strategy
28. Valuation Ranges
• Ranges determined through sensitivity or multiples analysis:
• Discounted Cash Flow- $282MM to $358MM
• Leverage Buyout- $655MM to $841MM
• DCF + Synergies- $346MM to $434MM
• Transaction Comparable - $330MM to $590MM
• Trading Comparable- $202MM to $430MM
• Discounted Cash Flow from a leverage buyout exceeds ranges of other
valuations
• Illustrates a premium the bondholders would receive if sold to private equity firm
30. LVMH Overview
• Founded in 1854 and based in Paris, France
• Sector: Services
• Industry: Jewelry Stores
• Manufactures luxury products
• Wines and Spirits, Fashion and Leather Goods, Perfumes and Cosmetics, Watches
and Jewelry, and Selective Retailing business groups
• Several Fashion & Leather brands: Louis Vuitton, Fendi, Marc Jacobs, Givenchy and Pucci
• Operates 3,040 stores worldwide
• Operates retail stores under the brand names of DFS, Miami
Cruiseline, Sephora, and Le Bon Marché Rive Gauche for travelers
LVMH Revenue ($Millions) 2011 Revenue by
25 21.5
Geographic Region
20 18.1 10%
15.6
15 13.2 13.1 France
12%
20% Other Markets
10 Revenue Asia
5 22% Japan
0 28%
United States
8%
2008 2009 2010 2011 2012
Sources: www.lvmh.com/invesot-relations
31. LVMH Overview
Acquisitions
• Les Tanneries Roux- France 60 Forecasted Growth from Operations
54.4
• Acquired Les Tanneries in May 2012 49.9
50
• Supplies leather goods 46.2
42.8
• Organic revenue growth of LVMH 39.5
$ Millions USD
40 36.7
increased by 10% in the first half of
2012 after acquisition 30 26.7
• Bulgari 20
10.3 11.4
• Acquired Bulgari in 2011 for $5.2 10 7.7 8.4 9.3
6.2 7.3 7.9
4.5 5 5.6
billion
• Proposed an action to double the 0
size of its watches and jewelry unit 2012 2013e 2014e 2015e 2016e 2017e
• Profit from recurring operations Sales Operating Profit Net Income
increased by 87% as a result of
Bulgari‟s performance
Sources: Yahoo! Finance (Exchange rate of 1.3058 on 15 March 2013)
Thomas Reuters (Forecasted Growth form Operations)
32. LVMH Overview
• Strategic Fit:
• Based on Gali Koval‟s initial attempt to expand internationally, LVMH
provides major markets geographically
• Due to its brand development strategy and more than 3,000 stores
worldwide
• Supports the growth of the brands by respecting their identity and their
creative positioning
• Strength of star brands with solid financial structure and geographical
balance of revenue
• Concerns/Risk:
• Sole purpose is not strictly in the retail/apparel industry
• Main focus on prestige/luxury brands with considerable growth
• Headquartered in France and most business is conducted overseas
• Continuous Europe‟s sovereign debt crisis and Eurozone crisis can affect
performance in European markets
Source: www.lvmh.com/investor-relations
33. PVH Overview
• Founded in 1881 and is based in New York, New York
• Sector: Consumer Goods
• Industry: Textile: Apparel Clothing
• Ticker Symbol: PVH
• Leases and operates approx. 1,000 retail locations
• Markets products through wholesale to national and regional department, mid-tier
department, mass market, and specialty and independent stores; and retail stores, as
well as through e-commerce Website
• Operates as an apparel company in the United States, Canada, Europe, and
internationally
• Brand portfolio includes:
• Calvin Klein, Tommy Hilfiger, IZOD, Heritage
PVH Revenue ($ billions) 2011 Revenue by
6 Geographic Region
5.5
5 4.64
4.5 Europe
4
3.5 PVH Revenue 21% 27%
3 2.43 2.49 2.40 North
2.5 (in billions)
2 America
1.5 52%
1 Other
2008 2009 2010 2011
Source: Yahoo! Finance
34. PVH Overview
Acquisitions
• Calvin Klein 2011 Revenues: $5.9B
• Acquired Calvin Klein in 2003 for approximately $3.0
Billion from Warnaco Group Tommy Hilfiger Calvin Klein Heritage Brands
• Continued expansion of men's sportswear business
• Growth after the acquisition rose at a 13% compound
annual growth rate
• Generated approximately $2.8 billion in global retail
stores after the buyout $1,775B
$3,051B
• Tommy Hilfiger $1,065B
• Acquired Tommy Hilfiger in 2010 for approximately
$3.0 Billion from Warnaco Group
• Focused expansion in Europe and Japan
• Growth after acquisition rose at a 13% compound
annual growth rate Planned Annual Top Line Growth
• Growth opportunities remain to drive Tommy Hilfiger ($ billions)
from $4.6 billion in worldwide retail revenues in 2010 2011A 2014E
to over $6.5 billion
$10
$7.6 $7.3
• Heritage Brands $5.6
• Acquired in 2010 $3.4 $3.7
• 10% revenue increase after acquisition in 2010
• Incurred $3.3 billion in worldwide retail revenue
in 2010 Calvin Klein Tommy Hilfiger Heritage
Brands
• Forecasted growth of 4.0 billion
Sources: Yahoo! Finance
PVH.com
35. PVH Overview
• Strategic Fit:
• Continued opportunities for PVH through license and brand extensions
and international expansion, the next leg growth for firm
• Estimated EV/EBITDA of 8.2x
• Believe sales growth in the low- to mid single digit range
• Value in management‟s long-term strategy:
• Contains structural improvements to the operating model
• Established a vast distribution network
• Spans lower-priced discount channels, department stores and high-end retail
boutiques
• Concerns/Risk:
• With targeted 8%-10% growth rate for Calvin Klein and Tommy
Hilfiger, there is a risk of saturations and overextension in the labels
• Operates in a extremely competitive consumer market that is affected
by macro/consumer trends
• Challenges in getting more floor space in department stores for new
Source: Morningstar
launches as retailers push for more private-label merchandise
36. Recommended Buyer
• PVH Corporation
• Successfully evolved into a diverse portfolio firm
• Exposure across a number of company-owned brands, licenses, and
apparel categories
• Established vast distribution network
• Thus cross-selling and promotional opportunities
• Reaching international presence is next goal
• Record of success with acquisitions
• Calvin Klein doubled global retail sales and est. 13% compound annual
growth rate in 2003
• Build dominant position in fragmented categories
• Such as men‟s dress shirts and neckwear
• Perfect fit for Gali Koval to be incorporated
Source: Morningstar & PVH.com
38. Brand Name
• Apparel and accessories industries remains extremely
competitive and highly fragmented
• Getting into business is easy, staying in is much more difficult
• Start-up companies are undercapitalized and lack broad-based global sourcing
• Lack marketing muscle to build exposure and brand loyalty among customers
• Small firms often seek to be acquired by larger companies to expand sales
• Strong brand image is crucial
• Manufacturers have more price flexibility by creating “must-have” perception
• Brand extension can strengthen the perception of value associated with
brand
• Established brand names:
• Convey image of quality
• Builds customer loyalty
• Translate to repeat business
Source: Standard & Poor‟s Industry Surveys-Apparel & Footwear: Retailers and Brands
40. Licensing & Trademarks
• Licensing is means for companies to extend their product lines
• Key element of integrated brand-marketing program
• Enables a company to extend its brand into new categories
• 2011, brand owners collected $5.3 billion in licensing royalty revenue
in North American
• Increase of 5.0% from 2010
• Trademarks/brands royalty revenue was 17% of total- $910MM
• Trademarks help identify and distinguish a brand name
• Company name and logo are the most valuable assets
• Gives you exclusive rights for the company to use
• Can sue subsequent parties for trademark infringement
Source: Standard & Poor‟s Industry Surveys-Apparel & Footwear: Retailers and Brands
42. Trademark Dispute
• Situation Summary:
• Gali Koval never authorized MJD, a maker of fine watches, to use the Gali Koval
trademark
• MJD willfully infringed the Gali trademark by selling imitation watches under the
Gali trademark without license
• MJD had been operating from 2008-2010 while using the Gali Koval mark in
connection with the manufacture, distribution and sale of watches
• Under belief, MJD had full knowledge of Gali Koval‟s trademark and intentionally
used it to:
• Drive in customers
• Increase profits
MJD Sales of Gali Branded Watches ($K)
43. Trademark Dispute
• Reasons to Sue MJD:
• MJD had no authorization to use „Gali‟ trademark to:
• Manufacture, distribute, or sell the watch
• MJD is not associated with Gali Koval through:
• Sponsorship, approval, or endorsement
• MJD willfully infringed the „Gali‟ trademark without license
• Under belief they had full knowledge of Gali Koval and intentionally use it to drive customers
and increase profits
• Potential Harm to Gali‟s Business:
• Unfair competition and false designation of origin
• Gali Koval prestige brand image is negatively affected
• Misleads consumers of the value and premium price
• Missed the opportunity to collect additional revenue through the sales of the brand
name watches
• Missed opportunity to expand in the accessories market internationally
• Alternatives to Settle Dispute in Trademark Infringement:
• 1. Legal Dispute- Proceed to Court
• 2. Brand Name Licensing with MJD
Source: Bloomberg Terminal Law
44. Trademark Dispute
• Assumptions-Legal Dispute:
• Royalty Rate: 6.0%
• Based on average trademark valuation of similar merchandising licenses agreements 1:
• Royalty Rate 5.0%: Dussault Apparel Inc. & Gene Simmons Company and USPA Accessories LLC
• Royalty Rate 7.0%: Guess Inc. & Marc Fisher Footwear
• WACC: 13.79%
• Based on previous WACC calculation of Gali Koval
• Signifies that risk of cash flows is the same as overall risk of Gali Koval
• The court case will last for 2 years
• Licensing Fees:
• Total damage fee of 5.43MM, and discount back to PV is $4.23MM
• If cash is needed in the short term, a provided discount of 70% results in a settlement price of
$3.80MM
Source: 1. Bloomberg Terminal Law
45. Trademark Dispute
• Assumptions- Future Cooperation
• Royalty Rate: 6.0%
• Based on average trademark valuation of similar merchandising licenses agreements1:
• Royalty Rate 5.0%: Dussault Apparel Inc. & Gene Simmons Company and USPA Accessories LLC
• Royalty Rate 7.0%: Guess Inc. & Marc Fisher Footwear
• WACC: 13.79%
• Based on previous WACC calculation of Gali Koval
• Signifies that risk of cash flows is the same as overall risk of Gali Koval
• MJD revenue will grow at 15%/yr. for the next 5years
• Licensing Fees
• Future licensing cash flow will result in a Present Value range of $8.8MM-$10.3MM
Source: 1. Bloomberg Terminal Law
46. Trademark Dispute
• Recommendation:
• Unless Gali Koval needs immediate payment to pay back any costs, Gali
would benefit establishing a relationship with MJD:
• Based on previous MJD sales growth of the Gali-branded watches, it provides a
platform for the Gali brand name to expand
• Thus, generating more revenues for future growth
• Competitive advantage to use MJD established market internationally
• Gali Koval does not have a market share for watches
• Can use MJD‟s networks and resources to develop other accessories and/or luxury
products
• To prevent further trademark infringements, Gali should be more inclined to
license its brand to third parties
• Or, register its trademark internationally to compete with other prestige brand names
• Opportunity to firmly establish Gali Koval‟s brand name internationally
48. Comprehensive Recommendation
• Recommendation:
• Sell Gali Koval to a private equity firm
• Leverage buyout establishes a consideration value of $733MM
• LBO analysis results in a price range of $655MM to $841MM
• Valuation range higher than alternatives
• Offers debt-holders the best feasible price
• Acquirer will offer a strong financial support in the expansion of the low-
priced product line
• Change in business structure can result in future operating growth
• Change in financial structure can improve operating efficiency
• Settle trademark dispute with MJD
• Future license fees add about $9.53MM in 5yrs.
• Sensitivity analysis future licensing fees range from $8.82MM to $10.32MM
• Deal Structure:
• Similar all cash acquisitions within the apparel industry
• Acquirers are capable of paying in all cash, thus bondholders will receive
immediate payment