Notable News to Watch: Genesco Inc. (NYSE:GCO)

December 19, 2019

On Dec. 18, 2019, Genesco Inc. (NYSE:GCO) revealed it has entered into a definitive asset purchase agreement to acquire New York-based Togast LLC (Togast), which specializes in the design, sourcing and sale of licensed footwear. The purchase price for the acquisition is $33.7 million in cash at closing, plus up to an additional $34.0 million in cash contingent on the achievement of financial targets over the next four years. The purchase price paid at closing is expected to be funded from cash on hand. The transaction, which is subject to customary closing conditions, is expected to be completed in January 2020, and is expected to be accretive to next year’s earnings.

Prior to the acquisition, Togast served as distributor for Levi’s footwear in the United States. Commensurate with the closing of this transaction, Genesco will enter into a new U.S. footwear license agreement for men, women and children for Levi’s®, as well as renew and extend its men’s Dockers® footwear license. The addition of privately owned Togast brings to Genesco new sources of revenue and synergistic product development and offshore sourcing capabilities, which complement and enhance Genesco’s Licensed Brands division. In addition, the Togast purchase expands Genesco’s portfolio to include footwear licenses for G.H. Bass & Co., ADIO and FUBU, among others.

Genesco Chairman, President and Chief Executive Officer Robert J. Dennis said, The acquisition of Togast adds scale to our successful licensed brands platform. The combination of our licensed business with Togast’s strengths furthers our footwear focused strategy by creating an even more robust platform within Genesco that can serve multiple tiers of distribution. We are also excited to add the Levi’s® footwear license to our portfolio and expand upon our long-standing business relationship with Levi Strauss & Co., which dates back to 1991.

Genesco Licensed Brands President Andy Gilbert said, We are pleased to broaden our portfolio of licensed footwear brands. We immediately recognized the sourcing capabilities and corresponding synergies with Licensed Brands that we would achieve through the acquisition of Togast, and I am personally excited to welcome Tony LoConte and his team to the Genesco family.

On Wednesday Genesco Inc. (NYSE:GCO) started its trading session with the price $49.56 and closed at price of $50.54 by scoring 2.04%. Day range of the stock was $49.39 – $50.88. GCO stock traded with total volume of 336535 shares while the average trading capacity remained 384671 shares.  Earnings per share was $-1.61. GCO has total market capitalization of $742947110.

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