Transformative Partnership Immediately Positions MSLO for New Expansion and Growth
NEW YORK – June 22, 2015 – Sequential Brands Group, Inc. (NASDAQ:SQBG) (“Sequential” or the “Company”), announced today that it has signed a definitive merger agreement to acquire 100% of the outstanding shares of Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) (the “Merger”) for aggregate consideration valued at $6.15 per share, payable 50% in stock and 50% in cash.
The Merger adds a new vertical to Sequential’s platform, which is expected to generate nearly $3.75 billion in annual global retail sales from a combined portfolio of consumer brands in the Home, Fashion, Lifestyle & Active categories.
Under the terms of the merger agreement, which has been approved by the boards of directors of both companies, Martha Stewart will continue to be an integral part of the brand she founded, with a renewed long-term commitment to serve as Chief Creative Officer. Ms. Stewart will become a significant stockholder of the new public holding company of Sequential and MSLO and Ms. Stewart will be nominated to serve on its board of directors as of the closing.
“This is a transformational merger for Martha Stewart Living Omnimedia, the company I founded in 1997. This merger is positioned to further the growth and expansion of the unique Martha home and lifestyle brand. In 1991, I started a magazine, Martha Stewart Living, which was the first of its kind. Out of our groundbreaking editorial content grew an influential brand which quickly evolved into other media, merchandising and digital platforms and products which have helped consumers, worldwide, live better, more fulfilling lives,” said Founder Martha Stewart. “With our media business operations now successfully transitioned to Meredith, we now have the opportunity to tap into Sequential’s expertise and resources to expand our merchandising business both domestically and abroad. The Sequential team is smart, hardworking, and understands the power and limitless opportunity of the Martha Stewart brand and its formidable design, editorial and marketing teams. I’m looking forward to working with them.”
Yehuda Shmidman, CEO of Sequential, commented, “Martha Stewart’s impact around the world is staggering, and the empire she founded is unmatched in its industry. In fact, research shows that the Martha Stewart brand has 96% awareness among women in the U.S. and 7 out of 10 women say that Martha has and does influence the way they think about, organize, and manage their homes. Looking ahead, we believe that we can leverage our global activation platform at Sequential in partnership with Martha and her team to develop the next chapter of growth for the Martha Stewart brand. We are honored to have this opportunity and thrilled to be working together with Martha Stewart.”
Martha Stewart Living Omnimedia is a leading provider of original, “how-to” information, inspiring and engaging consumers with unique lifestyle content and beautifully designed, high-quality products. Recognized as the authority in the home and lifestyle space, MSLO reaches approximately 100 million consumers across all media platforms each month and has a growing retail presence in thousands of locations with leading retailers such as Macy’s, The Home Depot, PetSmart, Michaels and Staples. Throughout the years, MSLO has been recognized by the industry for its award-winning content including multiple national magazine awards, 19 Emmys, 4 James Beard Awards, several Webby Awards and more.
The Merger also brings the Emeril Lagasse culinary brand, inclusive of its strong stable of food and cookware product lines, award-winning television and book publishing properties, as well as its legendary founder to the Sequential portfolio.
William Sweedler, Chairman of Sequential, stated, “This transformational acquisition marks an incredible milestone for Sequential as it not only delivers on the vision we put in place when we founded Sequential, but also sets the stage for the Company’s next phase of growth. Once we close, our run rate will surpass our published three year financial plan, and we will be set us up to publish a new three year financial plan that is more than double our current goals for both revenue and adjusted EBITDA.” Mr. Sweedler added, “I look forward to Martha Stewart joining our Board of Directors and I’m excited for our future.”
“I am truly proud of the hard work that has been done by the team at MSLO, particularly over the past 18 months, to take our iconic, peerless American brand that Martha Stewart has built into its next phase of growth,” said Chief Executive Officer, MSLO, Dan Dienst. “Against the backdrop of Martha’s vision, an invigorated, strong and competitive MSLO and the new partnership with Sequential and its leadership team, I am excited to help execute on this next chapter of shareholder wealth creation.”
Sequential has obtained committed financing from GSO Capital Partners LP, an affiliate of Blackstone Group. The deal team that represented Sequential during the acquisition was led by Tengram Capital Partners and Gibson, Dunn & Crutcher LLP acted as legal counsel. Consensus Securities provided a fairness opinion to Sequential’s Board of Directors.
An independent committee of the Board of Directors of Martha Stewart Living Omnimedia negotiated the transaction on the company’s behalf and recommended that the company’s Board of Directors approve the transaction. The independent committee received investment banking advice and a fairness opinion from Moelis & Company and legal advice from Debevoise & Plimpton LLP. Grubman, Shire & Meiselas and Wachtell, Lipton, Rosen & Katz served as legal advisors to Martha Stewart.
The acquisition, which is expected to close in the second half of 2015, includes a 30-day “go-shop” period for Martha Stewart Living Omnimedia and is subject to customary closing conditions and approval by the holders of a majority of the MSLO outstanding common stock not owned directly or indirectly by Martha Stewart or her affiliates. The Company will provide further details on plans for the newly acquired family of brands and financial impact associated with today’s announcement when the transaction is completed.
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