Express, WHP Global enter strategic partnership

Express and WHP Global announced that they have entered into a mutually transformative strategic partnership to advance an omnichannel platform which is expected to drive accelerated, long-term growth through the acquisition and operation of a portfolio of brands. EXPR and WHP will also form an intellectual property joint venture intended to scale the Express brand through new domestic category licensing and international expansion opportunities. The partnership will be effectuated through a multifaceted transaction. EXPR will form an intellectual property joint venture with WHP, which will acquire certain intellectual property of EXPR. Concurrently, EXPR will transform into an omnichannel platform company, managed and run by its current leadership upon closing of the transaction. All other aspects of the existing EXPR business remain unchanged. Under the terms of the transaction, WHP will also make a common equity PIPE investment to acquire 5.4M newly issued shares of EXPR at $4.60 per share, representing an approximate pro forma ownership of 7.4%. The intellectual property joint venture implies a total value of the Express brand’s intellectual property at approximately $400M and will be 60% owned by WHP and 40% owned by the EXPR platform company. WHP will invest $235M for its stake in the intellectual property joint venture and EXPR will contribute certain of its intellectual property assets in exchange for cash consideration. EXPR will enter into an exclusive long-term license agreement with multiple renewal options with the intellectual property joint venture to use the contributed intellectual property for EXPR’s existing business and will pay a royalty fee to the intellectual property joint venture. Cash earnings in the intellectual property joint venture will be distributed quarterly to both parties on a pro rata basis. The transaction is expected to close in EXPR’s fourth fiscal quarter of 2022, subject to lender consent, regulatory approvals and customary closing conditions.