Joe’s Jeans and RG Parent announced two transformative transactions. First, the company has agreed to sell the Joe’s brand and operating assets for an aggregate purchase price of $80 million to two separate buyers, Sequential Brands Group and Global Brands Group Holding Limited.
Proceeds from the transactions will be used to retire certain outstanding indebtedness, including all indebtedness owed to the company’s senior term loan lender.

The company also announced that Tengram Capital Partners will invest $50 million into the new platform to facilitate acquisitions of complementary premium brands

According to a related 8-K filing, Joe’s Jeans’ $60 million term loan agreement is with Garrison Loan Agency Service, as administrative agent. The company also has a $50 million revolving credit agreement, dated September 30, 2013, further amended by forbearance agreement on June 26, 2015, with a lender group led by CIT Commercial Services as administrative agent. CIT Finance is shown as sole lead arranger and sole bookrunner.

The closings of the asset sale transactions are subject to satisfaction or waiver of certain conditions, including the simultaneous closings of both asset sales. It is anticipated that the asset sale transactions will close by September 30, 2015.

Second, the company has agreed to merge the remaining Hudson business with the parent company of Robert Graham, RG Parent, a nationally-recognized fashion brand. The strategic combination of the Robert Graham and Hudson brands will provide the foundation of a new, premium branded consumer platform that focuses on organically growing its owned brands through a global, omni-channel strategy, including premium wholesale department store and specialty stores, direct-to-consumer retail stores, ecommerce, and licensing.

The company said, upon the closing of the merger, the outstanding indebtedness of the company owed to its senior revolving credit lender CIT Commercial Services will be paid in full, as well as certain indebtedness to the convertible noteholders and Joe Dahan.

Additionally, the platform intends to seek opportunities to acquire accretive, complementary, premium-plus brands.

Upon the closing of the Joe’s brand asset sale transactions, the company will be renamed Differential Brands Group and remain listed on NASDAQ.

The name change signifies the transformation of these standalone businesses and the creation of a unified consumer platform. After the completion of the merger transactions, the Robert Graham equity holders will own approximately 47.3% of the common stock, the preferred stock owned by Tengram will be convertible into approximately 23.9% of the common stock, the convertible noteholders will own approximately 14.0% of the common stock and the existing stockholders will own approximately 14.2% of the Common Stock, all on a fully diluted basis. The merger is subject to regulatory approval, as well as a vote of the company’s stockholders on certain matters related to the merger, including a one for thirty reverse stock split, and is expected to close during the fourth quarter of 2015.

In connection with the merger, an affiliate of Tengram Capital Partners, a consumer-focused private equity firm and the controlling owner of the Robert Graham business, has agreed to sponsor a recapitalization of the combined business to improve and simplify the capital structure. Tengram will purchase $50 million of new series A convertible preferred stock of the company.

Michael Buckley, current chief executive officer of Robert Graham, who has previous public company leadership experience at True Religion, in addition to building Diesel, and Ben Sherman, has been tapped to lead DBG as chief executive officer, upon the closing of the merger.