AKA Brands to Acquire Menswear Brand DTC Mnml for $ 48.6 Million

Dive brief:

• Following its IPO, AKA Brands, an accelerator that cultivates direct-to-consumer fashion brands, acquired Mnml, a DTC menswear brand, for $ 48.6 million in cash and equity, according to a press release on Thursday. The deal was reached on October 14.
• AKA Brands has indicated that it expects the acquisition to be immediately accretive to net income. In fiscal 2020, Mnml made about $ 20 million in net income, and about 20% of that income came from overseas, according to the press release. Mnml has generated a double digit EBITDA margin this year to date.
• Mnml’s clothing will be sold through Culture Kings in the United States and Australia, as well as through its website, according to the press release.

Dive overview:

For AKA Brands, the acquisition of Mnml is part of the company’s efforts to become an international leader in DTC fashion, Jill Ramsey, CEO of AKA Brands, said in a statement. Ramsey noted that the brand’s merchandising chops and engaged customer base will drive growth for both the Mnml brand and Culture Kings.

“The acquisition strengthens our presence in the dynamic streetwear market, and we are confident that Mnml has enormous opportunities for significant growth in the United States and internationally,” Ramsey said in a statement.

At the end of August, AKA Brands took advantage of the stock market heat and filed for an IPO, joining other companies in the DTC space, such as Allbirds and Honest Co. who have filed in recent months. The company initially planned to sell approximately 13.9 million shares between $ 17 and $ 19, placing its value at $ 2.5 billion. However, by the time the brand debuted in September, it had lowered its price target to just $ 11.

As AKA Brands gains a share in the streetwear market, other companies have entered the space as well. In March, the streetwear and sneakers market Stadium Goods unveiled a capsule collection of clothing, with 11 items priced between $ 85 and $ 400. And last November, VF Corp bought the streetwear brand Supreme for $ 2.1 billion, a decision to continue developing its street category, which already included The North Face, Timberland and Dickies.