Diversified media and merchandising company, Martha Stewart Living Omnimedia Inc. (NYSE: MSO) has been acquired for $353 million by Sequential Brands Group Inc. (NASDAQ: SQBG), a retail licensing company.
Sequential Brands Group Inc. endorsed an offer of $6.15 per share; a 21% premium to Martha Stewart Living's closing price as of June 15, 2015. The deal is intended to be half cash, half stock.
After revenue peaked at $328 million in 2007, Martha Stewart Living has declined in profit each following year, managing only $142 million of revenue by 2014.
In the past few years, Sequential Brands has become a major consolidator of well-known retailers, wholesalers, and distributors in the United States and internationally. Like Martha Stewart Living, the company license brands in the apparel, trending accessories. In April, the company acquired a market value of $569 million.
Martha Stewart Living retains more than 50% of its revenue from their publishing business and advertises home improvement products sold by retailers such a Home Depot Inc. (NYSE: HD) and Macy's Inc. (NYSE: M).
After the Journal’s report on Thursday, Martha Stewart Living’s shares closed up 26.3%, falling 14.4% on Monday to $5.97. Shares of Sequential Brand rose 2.6% to a nearly six year high of $17.45.
According to CEO of Sequential Brands, Yehuda Shmidman, the Martha Stewart brand has 96% awareness among women in the United States; 7 out of 10 women claim that Martha Stewart influences the way they think, organize, and manage their lives.
This merger will remodel the company's platform, making Stewart a significant stockholder and chief creative officer, while serving on the board of directors. The acquisition is expected to close in the second half of 2015.