Dechert LLP acted as lead counsel to DFBG and Richards, Layton and Finger acted as Delaware counsel to DFBG. 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.
Differential Brands Group Inc. (NASDAQ:DFBG), a portfolio of global consumer brands comprised of Hudson, Robert Graham and SWIMS, has entered into a definitive purchase agreement with Global Brands Group Holding Limited, a Hong Kong listed company (SEHK Stock Code: 787), to acquire a significant part of GBG’s North American licensing business, comprised of licensed brands such as Disney, Star Wars, Calvin Klein, Under Armour, Tommy Hilfiger, BCBG, bebe, Joe’s, Buffalo David Bitton, Frye, Michael Kors, Cole Haan and Kenneth Cole, for a purchase price of $1.38 billion, subject to adjustment. It is anticipated that upon closing, DFBG will have in excess of $2.3 billion in pro forma annual revenue comprised of branded men’s, women’s, and kid’s apparel, along with accessories that will be distributed to a diversified base of consumers across all retail and digital channels. The acquisition is expected to close in the third quarter of 2018.
The purchase price for the Transaction will be paid in cash. Fully committed debt financing for the Transaction is being provided by Ares Capital Management LLC, HPS Investment Partners, LLC and GSO Capital Partners LP. Relatedly, certain members of GBG’s existing management team, co-investors and lenders will be making an equity investment in the common stock of DFBG (the “Equity Issuance”). Upon the closing of the Transaction, Tengram Capital Partners, LP will convert all of its Series A and Series A-1 Convertible Preferred Stock into common stock of DFBG.
The closing of the Transaction is subject to satisfaction or waiver of customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, the approval of the GBG’s stockholders under applicable Hong Kong listing guidelines and the approval of DFBG’s stockholders in connection with the Equity Issuance pursuant to NASDAQ listing requirements and regulatory approvals. As part of the Transaction, certain stockholders of the Company, namely Tengram Capital Partners, LP and its affiliates, have agreed to vote in favor of such Equity Issuance, and certain stockholders of GBG, namely, Fung Holdings (1937) Limited, have agreed to vote in favor of the Transaction.
Dechert advised Differential Brands Group Inc. with a team including Naz Zilkha (Picture), Gareth Clark, Jonathan Stott, Jacob Greenberg, Timothy Grosso, Emily Standen, Valerie Etienne, Angela Kim, Matthew Virag, William Elder and William Wu, as well as cross-border support from Hong Kong-based partner Stephen Chan and associates Denise Tsui and Charles Lam. Additional assistance was provided by leveraged finance partners Scott Zimmerman and Samantha Koplik and leveraged finance associates Adam Longenbach and Cesar Sanchez; tax partner Steven Clemens and tax associate Elizabeth Guidi; IP partner Thomas Rayski and IP associate Noah Shier; employee benefits partner David Jones and employee benefits associates Sarah Burke and Aryeh Zuber; real estate special counsel Francois Quintard-Morenas; labor associate Jeff Rubin; environmental partner Abbi Cohen; regulatory partner Jeremy Zucker and regulatory associate Darshak Dholakia; and antitrust partner James Fishkin and antitrust associates Beverly Ang and Michael Okkonen.
The Freshfields team advising on the deal was led by partner and China chairman Teresa Ko, partner and co-head of global M&A Matthew Herman and partners David Almroth, Aly El Hamamsy, Edward Freeman and Daniel French. They were supported by counsel Sebastian Fain. Counsel Laura Chapman advised on employment law matters.
Global law firm Reed Smith advised Global Brands Group Holding Limited with a team including Sahra Dalfen, Yun (Joy) Zhang and Sophie Ha
Involved fees earner: Nazim Zilkha – Dechert; Gareth Clark – Dechert; Jonathan Stott – Dechert; Jacob Greenberg – Dechert; Timothy Grosso – Dechert; Emily Standen – Dechert; Valerie Etienne – Dechert; Angela Kim – Dechert; Matthew Virag – Dechert; William Elder – Dechert; Yufeng Wu – Dechert; Stephen Chan – Dechert; Denise Tsui – Dechert; Charles Lam – Dechert; Scott Zimmerman – Dechert; Samantha Koplik – Dechert; Adam Longenbach – Dechert; Cesar Sanchez – Dechert; Steven Clemens – Dechert; Elizabeth Guidi – Dechert; Thomas Rayski – Dechert; Noah Shier – Dechert; David Jones – Dechert; Sarah Burke – Dechert; Aryeh Zuber – Dechert; Jeffrey Rubin – Dechert; Francois Quintard-Morenas – Dechert; Abbi Cohen – Dechert; Jeremy Zucker – Dechert; Darshak Dholakia – Dechert; James Fishkin – Dechert; Beverly Ang – Dechert; Michael Okkonen – Dechert; Sahra Dalfen – Reed Smith; Yun Zhang – Reed Smith; Sophie Ha – Reed Smith; Teresa Ko – Freshfields Bruckhaus Deringer LLP; Matthew Herman – Freshfields Bruckhaus Deringer LLP; David Almroth – Freshfields Bruckhaus Deringer LLP; Aly El Hamamsy – Freshfields Bruckhaus Deringer LLP; Edward Freeman – Freshfields Bruckhaus Deringer LLP; Sebastian Fain – Freshfields Bruckhaus Deringer LLP; Daniel French – Freshfields Bruckhaus Deringer LLP; Laura Chapman – Freshfields Bruckhaus Deringer LLP;