Back to top

Analyst Blog

Iconix Brand Group, Inc. (ICON - Analyst Report) has priced its 1.50% convertible senior subordinated notes, which were issued last week. However, Iconix has increased the size of the private offering to $350 million from $325 million. The company expects net proceeds of about $342 million from the private offering.

In addition, Iconix will offer the initial purchaser of the notes to buy up to additional $50 million aggregate principal amount of notes within 30 days. If the option is fully exercised, Iconix expects the net proceeds to be approximately $391 million from the offering.

Iconix expects to utilize the net proceeds to repurchase about 3 million of its shares for approximately $69 million. Also, the company can use the proceeds to fund the cost of a convertible note hedge transaction and a warrant transaction and for general corporate purposes, such as investments or acquisition of new brands or additional share repurchases.

Since Jan 1, 2013, Iconix has repurchased approximately 2.6 million shares for approximately $62.0 million. Last month, Iconix announced a new share repurchase program to repurchase up to $300 million of its common stock over a three-year period.

Iconix has a diversified portfolio of brands. Iconix builds its brand portfolio by acquiring new brands, entering into joint ventures or other partnerships, each of which enhances the company’s brand management expertise and existing infrastructure.

Most recently in February, Iconix acquired the renowned lifestyle brand Lee Cooper for $72 million to strengthen its brand portfolio and to expand in important international markets, which now account for 33% of its overall business. Iconix has also formed a joint venture with Buffalo International ULC to acquire a 51% interest in the latter’s Buffalo David Bitton brand for $76.5 million, which will help Iconix to expand its retail footprint in the U.S. and Canada. Again, in early-Dec 2012, the company added sports apparel and footwear brand, Umbro from its peer Nike Inc. (NKE - Analyst Report) to further strengthen its diversified portfolio.

Currently the stock carries a Zacks Rank #3 (Hold). Other favorable stocks in the consumer discretionary sector worth considering are Skechers Usa Inc (SKX - Analyst Report) and Michael Kors Holdings Ltd (KORS - Analyst Report), both of them holding a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%