GAIAM Inc., Boulder, Colorado, recently agreed to sell its consumer products business, including SPRI, and sold its interest in Natural Habitat Inc., Boulder, to focus on developing its digital subscription service.
GAIAM sold its branded consumer products business to Sequential Brands Group Inc., New York City, for approximately $146 million, according to a media release on Wednesday. The consumer business includes GAIAM's yoga, fitness and wellness products, including the GAIAM and SPRI brands, which are distributed through Amazon, Kohl's, Target, and Bed, Bath & Beyond. The brands will integrate into sequential's Active Division, which is currently anchored by the AND1 and AVIA brands.
GAIAM also sold its 51 percent interest in Natural Habitat for $12.85 million to Lindblad Expeditions Holdings Inc., New York City, in a deal that closed on May 4, according to a press release.
Gaia, formerly GAIAM TV, is GAIAM's global digital subscription service with approximately 7,000 videos available for streaming and download. GAIAM TV accelerated its name change and rebranded to Gaia in the fourth quarter of 2015 instead of a planned second quarter 2016 rollout, Jirka Rysavy, founder and chairman, GAIAM, told analysts in a conference call in March.
"We expect the Gaia subscriber growth rate to increase meaningfully in this coming year," Rysavy said, noting its subscriber numbers increased at 90 percent the annual rate in 2016 to 155,000 paying members. "We believe this market has significant and growing tailwinds."
GAIAM (NASDAQ:GAIA) reported revenue of $188 million in 2015.
"We believe this is a home run for Sequential," Sequential CEO Yehuda Shmidman said in a statement. "The acquisition is immediately accretive to earnings, and aligns with our long-term playbook of acquiring brands with significant, untapped potential where we can immediately unlock value and position them for long-term organic growth."
In tandem with the acquisition, Sequential signed long-term licensing agreements for the brands’ core categories, which will become effective upon closing. Fit For Life will be the licensing partner for the hard goods and equipment categories as well as the digital properties, and High Life will be the licensing partner for GAIAM’s yoga and athleisure apparel business. Sequential brands include Martha Stewart, Emeril Lagasse, Jessica Simpson and William Rast. Sequential (NASDAQ:SQBG) reported revenue of $88.3 million in 2015.
"The combination of GAIAM’s innovative products and authenticity in the active lifestyle space, coupled with Sequential’s extensive retail relationships and strategic approach to brand building sets the stage for taking both the brands to new levels," GAIAM CEO Lynn Powers said in a statement. "I am happy to be working with Sequential and the Fit For Life and High Life teams to ensure the culture of the GAIAM brands live on and grow."
Natural Habitat is an expedition travel company that focuses on nature and wildlife travel. In a press release, Ben Bressler, founder and president, Natural Habitat, called Lindblad a "leader in expedition travel" and the "right strategic partner" to evolve its business.
Powers said of Bressler: "I am excited to watch Ben and his team on this next phase for NatHab, and I anticipate that the combination with Lindblad will afford them a wide range of exciting new opportunities for growth and innovation."
On May 5, Lindblad announced it acquired 80.1 percent of Natural Habitat outstanding common stock. Bressler retained ownership interest of 19.9 percent in the Natural Habitat business and will continue as president of the new Lindblad subsidiary. The acquisition provides Lindblad a platform to expand into land-based offerings, according to a press release. Natural Habitat's net revenues were $41 million in 2015.