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Iconix Brand Group, Inc. Closes Mossimo Merger

Posted on: Wednesday, 1 November 2006, 09:00 CST

NEW YORK, Nov. 1 /PRNewswire-FirstCall/ -- Iconix Brand Group, Inc. ("Iconix" or the "Company") announced today that the Company has completed the merger of Mossimo, Inc. ("Mossimo") with and into a subsidiary of Iconix. The Company signed a definitive agreement as of March 31, 2006 to acquire Mossimo subject to the receipt of certain regulatory clearances that have since been received, and the approval by the Mossimo stockholders which occurred at a special meeting called for such purposes on October 31, 2006.

Iconix acquired all of the outstanding shares of Mossimo, Inc. in consideration for 0.2271139 of a share of Iconix common stock and $4.25 in cash for each share of Mossimo common stock. The total purchase price for Mossimo Inc. was 3,608,810 shares of Iconix common stock and $67.5 million in cash. On closing Mossimo had approximately $22 million in cash. Mossimo stockholders also received non-transferable contingent share rights entitling them to additional shares of Iconix common stock after the first anniversary of the merger if Iconix's common stock does not close at or above $18.71 for at least 20 consecutive trading days during the year following the merger. Based upon the three day average price of Iconix stock prior to the closing, the maximum additional shares of common stock that Iconix potentially will have to issue is approximately 41,000 shares. In addition the Company paid Cherokee Inc. $33.0 million upon the closing of the merger in connection with a termination and settlement agreement with Cherokee.

To finance the transactions, the Company borrowed $90.0 million from Merrill Lynch Mortgage Capital Inc. pursuant to a two-year secured note that bears interest at a variable rate equal to the three-month LIBOR plus 5.125% per annum.

The Mossimo brand is projected to generate between $20 and $25 million in 2007 royalty revenue, primarily from a license agreement with the Target Corporation, but with additional contribution from licenses in Australia, South America, Mexico and Japan. As part of the transaction, Mossimo Giannulli, founder and chairman of Mossimo, Inc, has joined Iconix as a consultant and will continue to work with the Company to build the brand domestically and internationally.

Neil Cole, Chairman and CEO of Iconix, stated, "We are thrilled to have added Mossimo to our growing portfolio of powerful brands. Not only does this acquisition further diversify our revenue base, but it also solidifies our relationship with Target, one of the world's leading retailers. I am confident that Mossimo will continue to grow around the world into an even stronger lifestyle brand."

Iconix Brand Group Inc. owns, licenses and markets a growing portfolio of consumer brands including CANDIE'S(R), BONGO(R), BADGLEY MISCHKA(R), JOE BOXER(R), RAMPAGE(R), MUDD(R), LONDON FOG(R) and MOSSIMO(R). The Company has also entered into a definitive agreement to purchase the brand OCEAN PACIFIC(R). The Company licenses its brands to a network of leading retailers and manufacturers that touch every major segment of retail distribution from the luxury market to the mass market in both the U.S. and around the world. Iconix, through its in-house advertising, promotion and public relations agency, markets its brands to continually drive greater consumer awareness and equity.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. The statements that are not historical facts contained in this press release are forward looking statements that involve a number of known and unknown risks, uncertainties and other factors, all of which are difficult or impossible to predict and many of which are beyond the control of the Company, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors include, but are not limited to, uncertainty regarding the results of the Company's acquisition of additional licenses, continued market acceptance of current products and the ability to successfully develop and market new products particularly in light of rapidly changing fashion trends, the impact of supply and manufacturing constraints or difficulties relating to the Company's licensees' dependence on foreign manufacturers and suppliers, uncertainties relating to customer plans and commitments, the ability of licensees to successfully market and sell branded products, competition, uncertainties relating to economic conditions in the markets in which the Company operates, the ability to hire and retain key personnel, the ability to obtain capital if required, the risks of litigation and regulatory proceedings, the risks of uncertainty of trademark protection, the uncertainty of marketing and licensing acquired trademarks and other risks detailed in the Company's SEC filings. The words "believe", "anticipate,""expect", "confident", "project", provide "guidance" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date the statement was made.

Contact: David Conn Executive Vice President Iconix Brand Group 212.730.0030 Joseph Teklits Integrated Corporate Relations 203.682.8200

Iconix Brand Group, Inc.

CONTACT: David Conn, Executive Vice President of Iconix Brand Group,+1-212-730-0030; or Joseph Teklits of Integrated Corporate Relations,+1-203-682-8200

Web site: http://iconixbrand.com/

Source: PRNewswire-FirstCall

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