MUMBAI: The famous Peanuts brand that includes the popular character Snoopy has changed hands for $175 million.
Iconix Brand Group has signed a definitive agreement with United Features Syndicate, Inc. ("UFS") and Scripps to acquire the Peanuts brand and related assets in partnership with the Schulz family.
As part of the transaction, which costs $175 million, 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 per cent by Iconix and 20 per cent by the Schulz family.
The characters of Peanuts, include 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.
Iconix Brand Group chairman and CEO Neil Cole says, " Peanuts is considered one of the most influential comic strips of all time and with its 60th anniversary this year the characters continue to be as popular as ever. Owning the Peanuts business moves Iconix well beyond fashion into a true global brand management entity with a wide variety of agreements that range from theme parks to media to financial institutions."
Jean Schulz, wife of the late Charles M. Schulz, commented, "We are grateful and proud of the active partnership we have had with United Media for the past 60 years. From the beginning, my husband worked directly with the people using his art to preserve the authenticity of his characters. Since his death, we have continued to do the same, working directly with our licensees to be true to my husband‘s art."
Craig Schulz, son of Charles M. Schulz, stated, "The Schulz family is extremely excited by the opportunity to create this partnership with Neil Cole and Iconix. Peanuts now has the best of both worlds, family ownership and the vision and resources of Iconix to perpetuate what my father created throughout the next century with all the goodwill his lovable characters bring."
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 per cent 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 per cent. In 2010, the accretion will be impacted by deal costs and will depend on the timing of the close.
