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intimates-activewear

Liz Sells Prana Brand

Management and Steelpoint Capital, a private equity firm, purchase active brand for $36.5 million plus performance-based addition.

Thirteen down, three to go: Liz Claiborne Inc. has sold active brand Prana in a management buyout for $36.5 million, plus up to $4 million more based on 2008 performance.

Prana Living LLC, a company formed by Prana's management team, and Steelpoint Capital Partners, a private equity firm with a portfolio that includes Kid Robot and Naked Juice, bought the $33-million eco-friendly brand for more than 11 times EBITDA.

"We are very pleased with the multiple we received and the recognition of what the brand stands for and what it can do," said Roberta S. Karp, senior vice president of business development, legal and corporate affairs at Claiborne.
 
At the closing of the deal, which is expected in a few weeks, Claiborne is set to receive $18.1 million in cash, after settling a contingent earnout of $18.4 million owed to the Prana founders, who have reinvested the money in the buyout.

Founded in 1993 by Beaver Theodosakis, Prana prides itself on its sustainable activewear and business model.  Acquired in 2005, Prana, which wholesales in 1,400 doors, was a victim of timing.

Even while on review, Prana has been aggressively expanding its business. This fall, it opened its first two retail doors and then launched a premium outerwear line Scapegoat. Additional retail investment plans, for 20 to 40 more stores, have been on hold until Prana has a new home.

The $4.99-billion Claiborne has promised to settle the fates of the three remaining brands – Ellen Tracy, Kensie and Mac & Jac – by the end of the first quarter.

For more, see Monday's issue of WWD.