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Digital Brands Group (DBGI) to Acquire Sundry

January 20, 2022 8:31 AM EST

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Digital Brands Group, Inc. ("we", "us" or the "Company") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today announces that it has signed a definitive merger agreement to acquire Sundry, a privately-owned global lifestyle apparel brand. The transaction is expected to be completed late in the first half of 2022, subject to customary closing conditions and financing.

Sundry Acquisition Highlights:

  • This acquisition is expected to immediately create significant scale in revenues and internal cash flow due to leveraging of shared expenses in both operations and marketing;
  • The acquisition should drive more brand awareness and customer demand, which in turn should fuel our future growth across our platform, brands and customers; and
  • This acquisition should create significant synergies between all our portfolio brands that results in significantly lower customer acquisition costs, higher customer retention, higher annual spend per customer and higher lifetime value per customer.

Sundry is an omnichannel women's lifestyle apparel brand inspired by Mattieu Leblan's upbringing and ocean lifestyle. Founded in 2011, Sundry offers distinct collections of women's clothing, including dresses, shirts, sweaters, skirts, shorts, athleisure bottoms and other accessories. Sundry's products are coastal casual and consist of soft, relaxed and colorful designs that feature a distinct French chic, resembling the spirits of the French Mediterranean and the energy of Venice Beach in Southern California. Sundry's founders and senior leadership team will remain with the company, headquartered in Los Angeles, California.

"We believe the Sundry acquisition is a transformative acquisition for Digital Brands Group. In the short term, this acquisition is expected to immediately create significant scale in revenues and internal cash flow for marketing and talent growth. In the long term, we believe this acquisition should drive more brand awareness and customer demand, which in turn should fuel our future growth across our platform, brands and customers," said Hil Davis, Chief Executive Officer of DBG.

Davis continued, "This acquisition will also transform our brand portfolio, which we believe should make it more attractive and engaging for our current and potential customers driving more brand awareness and demand. We believe this acquisition should result in a significant acceleration in our marketing strategies, customer acquisition growth, customer retention and annual spend per customer."

Laura Dowling, DBG's Chief Marketing Officer added, "Regarding customer reach, we believe this acquisition should result in a significant acceleration in our customer base due to Sundry's large direct-to-consumer list. We plan to leverage Sundry's customer list to cross market with our other brands. We believe this should create significant synergies between all our portfolio brands that results in significantly lower customer acquisition costs, higher customer retention, higher annual spend per customer and higher lifetime value per customer."

"We are excited to join Digital Brands Group, and we are excited to leverage the marketing expertise and team of Digital Brands Group," said Matthieu Leblan and Joe Levy, co-founders and co-CEOs of Sundry. "We believe this partnership will maintain our vision, while also providing growth capital and marketing expertise at a scale that we have never experienced."

Pursuant to the acquisition agreement, the holders of all of the outstanding membership interests of Sundry will exchange all of such membership interests for (i) $7.5 million of shares of the Company's common stock at the volume-weighted average (rounded to the nearest $0.0001) of the closing price of the Company's common stock on the Nasdaq Capital Market during the thirty (30) trading day period immediately prior to the closing, but in no event at a price less than $1.59, and (ii) $34.0 million represented by $20.0 million of cash which will be paid at the closing and $14.0 million in promissory notes due December 31, 2022, subject to adjustment. Please refer to the Company's Current Report on Form 8-K as filed with the Securities and Exchange Commission to review the details and specifics of the acquisition agreement.



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