Business
B. Riley Financial Increases Investment in bebe
B. Riley to purchase 3.7 million shares of bebe stores, inc. from founder Manny Mashouf B. Riley will own approximately 76% of the outstanding shares of bebe
About this update from Brc Group Holdings, Inc.
[{"type":"text","content":"B. Riley to purchase 3.7 million shares of bebe stores, inc. from founder Manny Mashouf\nB. Riley will own approximately 76% of the outstanding shares of bebe common stock\nLOS ANGELES, Sept. 25, 2023 /PRNewswire/ -- B. Riley Financial, Inc. (Nasdaq: RILY) (\"B. Riley\" or the \"Company\"), a diversified financial services platform, today announced it has signed an agreement to purchase 3.7 million shares of common stock of bebe stores, inc. (OTCQB: BEBE) (\"bebe\") from trusts formed by bebe founder, Manny Mashouf, at $5.00 per share for a total purchase price of $18.5 million. The closing date of the transaction is expected to occur on September 30, subject to the satisfaction of certain closing conditions.\n\n \n \n \n \n \n \n\n \nUpon the closing of the transaction, B. Riley's total ownership of bebe will be approximately 76% of the shares of common stock outstanding. Mashouf, who plans to step down from his roles at bebe in the near future, will continue to own approximately 4% of bebe's outstanding shares of common stock.\n\"Manny is a fashion innovator and the vision behind bebe during his 45-plus year tenure as Chairman and CEO. We greatly appreciate his continued leadership since our involvement with the company in 2018,\" said Bryant Riley, Chairman and Co-CEO of B. Riley Financial. \"This is an opportune time to increase our investment in bebe, and we expect that our expanded involvement in bebe's operations will add value based on our extensive experience in brand licensing and deep understanding of the rent-to-own industry. We expect this transaction to be accretive to B. Riley's EBITDA.\" \nRiley added: \"bebe's brand licensing investments have generated approximately $11 million per year in cash flow before corporate expenses to bebe over the past three years. We highly value this business model because royalties are historically stable and yield contractually obligated minimum payments from licensees. In addition to the licensing business, we believe that the Buddy's rent-to-own segment, which contributed $8 million of EBITDA in 2021 but suffered from ensuing inflationary pressures in 2022 and 2023, will revert back to normalized operating profit of approximately $6 million, before corporate expenses, over time.\" \nbebe was B. Riley's first brand licensing investment that led to the formation of its expanded br...