Daily News: November 29, 2016

Cerberus Supports Cherokee Global Brands Hi-Tec Sports Buy

Cherokee Global Brands, a global brand marketing platform that manages a growing portfolio of fashion and lifestyle brands, intends to enter into a share purchase agreement to acquire Hi-Tec Sports International Holdings, a global footwear company.

Cherokee will fund the purchase price through cash on hand, proceeds from a new credit facility with Cerberus Business Finance, proceeds from the sale of assets, including to the new operating partner licensees, a receivables funding loan to be provided by its board chair and the net proceeds from the proposed public offering of common stock as further detailed in the preliminary prospectus supplement filed by the company on November 28, 2016.

Founded in 1974 and based in the Netherlands, Hi-Tec is a privately-held branded footwear company that designs, markets and sells footwear globally, primarily under the Hi-Tec and Magnum brands.

Upon closing of the transaction, Cherokee will sell substantially all assets related to Hi-Tec’s wholesale operations to new operating partners, the proceeds from which shall fund a portion of the Hi-Tec acquisition purchase price. Concurrently, the new operating partner licensees are entering into license agreements with Hi-Tec Sports International Holdings, a wholly owned subsidiary of Cherokee, pursuant to which each operating partner will pay Cherokee royalties for the future use of Hi-Tec intellectual property. Hi-Tec’s headquarters will remain in Amsterdam.

“The acquisition of the Hi-Tec and Magnum brands aligns with our strategic focus of diversifying and building upon our active lifestyle portfolio as we continue to grow our global footprint,” said Henry Stupp, CEO of Cherokee Global Brands. “Hi-Tec’s high-equity brands will build upon our presence in the active, outdoor markets, and we are excited by the potential to further expand these brands into additional categories including apparel, accessories, wearables, outdoor products and more.”