Sequential Brands Acquires Heelys Shoes
Los Angeles–based Sequential Brands Group, known for its William Rast and People’s Liberation labels, is on a roll.
The brand-hungry company announced on Dec. 10 that it plans to acquire Heelys Inc., best-known for those athletic shoes with a detachable wheel in the heel that turns mere pedestrians into gliding travelers.
“We are excited to be adding the Heelys brand to our portfolio. Heelys is recognized globally as a pioneer of skate shoes, and with its brand DNA rooted in innovation and skate, we see the potential for expansion in the future as a global lifestyle brand,” said Yehuda Shmidman, Sequential’s chief executive. “Fitting with Sequential’s brand-management business model, we have identified our long-term worldwide licensing partner for the core category of footwear and will announce the partner and the team managing the Heelys brand shortly.”
Earlier this year, Sequential bought DVS Shoe Co. for $8.55 million. The Heelys acquisition, which is expected to close during the first quarter of 2013, is for approximately $63.2 million.
This is the first brand acquisition under Shmidman, who took over as chief executive after a Nov. 20 announcement. Shmidman previously had been the chief operating officer for Iconix Brand Group in New York. He replaced Colin Dyne, who received a $2.3 million separation payment for his departure.
The Dallas-based Heelys had been up for sale for some time. A buyer was lined up in October. But that deal, with The Evergreen Ventures Group, a private-equity company, is off. Heelys said it plans to pay a termination fee to Evergreen.
“The Sequential transaction represents an attractive outcome and is in the best interest of Heelys' stockholders,” said Tom Hansen, Heelys president and chief executive. “Their all-cash offer provides our stockholders with a fixed-cash value and eliminates the need to proceed with the previously announced plan of dissolution.”
Until this year, Sequential Brands was called People’s Liberation, operating as a designer and wholesaler of apparel brands. But the company’s executives decided to change the business format to a licensing company that acquires brands and then works with licensees to manufacture and distribute core products. The new business was financed with $14.5 million in funds from Tengram Capital Partners in Westport, Conn., a private-equity firm that focuses on middle-market consumer and retail companies that own strong, recognizable brands.—Deborah Belgum
