RT Advisors' Brien Rowe Speaks to Shop-eat-surf on Authentic Brands Group Proposed Loan for Boardriders Deal Rated by Moody's

Brien Rowe recently spoke with Shop-eat-surf Editor Kari Hamanaka regarding Moody's issued rating on Authentic Brands Group proposed term loan, suggesting that a part of it might be utilized for acquiring Boardriders. This follows Authentic Brands' emergence as a potential purchaser of the action sports company.

The 'B1' rating, slightly below investment grade, was assigned to Authentic's proposed senior secured first lien credit facilities, including a $240 million revolver, a $1.5 billion term loan, and a $600 million delayed draw term loan, all maturing in 2028. According to Moody's, the proceeds from the $600 million loan would potentially finance the acquisition of Boardriders, while those from the term loan are expected to refinance debt maturing in September 2024.

Moody's analysis highlights the risks associated with Authentic's debt due to its history of acquisitions, such as Reebok and the David Beckham brand, resulting in increased debt. However, licensing royalties and improved earnings partially offset these risks.

Brien Rowe, Founder and Managing Director of advisory firm RT Advisors and an M&A specialist, believes the Moody’s disclosure indicates Authentic wants to move forward on a deal. “I think it’s certainly an affirmation that they’re serious and they’re moving forward,” Rowe said. “A deal doesn’t close until it’s closed, but I don’t think it’s a casual reference. There’s some serious intent there and those that are watching this know that ABG has been looking and talking in and around the asset.”

Rowe has advised in transactions involving RVCA, Huf, Globe International, Fox Head, and several others in the action sports, streetwear, outdoor, and fashion spaces. “I’m not surprised to see them in the mix, and I think they could be good acquirers,” Rowe said. “They’ve got Volcom, Vision Street Wear, Spyder. They’ve done some great things with a number of relevant assets.”

Authentic's diverse portfolio comprises over 40 brands, with revenue exceeding $950 million for the year ended September 2023, demonstrating resilience even during the pandemic.

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