By Benyamin Davidsons
The BlackRock investment group purchased a $875 million stake in Authentic Brands, the company that manages well-known brands including sports illustrated, juicy couture, nine west, and Marilyn Monroe to name a few. As reported by Yahoo News, this is the first investment for Long Term Private Capital, which is BlackRock’s new private-equity fund, created to diversify away from the group’s core Exchange-Traded-Fund business. BlackRock is the world’s largest asset manager, managing roughly $6.84 trillion in assets, as of June 2019. The global investment management giant, founded in 1988, has 70 offices in 30 countries around the globe, as well as clients in 100 countries. It is currently traded on the NY Stock Exchange, under ticker symbol BLK, under the leadership of CEO and co-founder Laurence D. Fink.
As reported by Bloomberg News, the $875 million deal values Authentic Brands at over $4 billion including debt, as per a source familiar with the matter. “ABG really ticked all the boxes,” said Andre Bourbonnais, Global head of Long-Term Private Capital. “We know that the very first transaction is going to be scrutinized. It had to be right in the middle of our strategy.” Bourbonnais said that Authentic Brands caught the private-equity fund’s eye thanks to its positive track record, consistent return, free cash flow, and admirable management team. Bourbonnais did not comment on the risk factors accompanying the investment. “We are delighted to have ABG as LTPC’s first investment,” added Bourbonnais. “ABG represents exactly the type of high-quality business run by a proven management team that we target with our investment strategy. ABG will have the full support of the LTPC team, our operating partners and the BlackRock platform. We look forward to a long and prosperous relationship.”
Long-Term Private Capital, launched last year by BlackRock, as an effort on part of the conglomerate to add alternative assets to its business. As of April, the fund had secured $2.75 billion in capital from investors, with $1.25 billion on hand and the remaining $1.5 billion committed. The New York City-based money manager set its goal to raising up to $12 billion.
Authentic Brands, founded in 2010, is a brand development, marketing, and entertainment company with a global portfolio including apparel, athletics, fashion, entertainment and lifestyle brands. Its holdings of over 50 brands include Elvis Presley, Muhammad Ali, Shaquille O’Neal, Nautica, Aeropostale, Adrienne Vittadini, Bandolino, Volcom, Vince Camuto, luxury brand Judith Leiber, active-wear maker Spyder, leather-goods provider Frye Co, and furniture retailer Thomasville. It boasts 4,930 stores, and a total of 9.3 billion in retail sales annually.
“The strategic investment by LTPC is a testament to the success we have had building a leading platform for the ownership and development of brand and media content,” said Jamie Salter, Chairman and CEO of Authentic Brands Group. “We believe BlackRock’s scale, global footprint and digital capabilities will enable us to build out our organization and continue our domestic and international growth trajectory. This investment marks an important and exciting next phase of expansion for ABG.”