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Authentic Brands Eyes IPO, Targets Creator Economy

Bloomberg Markets •
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Authentic Brands Group, licensor of Elvis Presley’s image and Reebok, could pursue an initial public offering as early as the first half of next year. “The company is ready,” CEO Matthew Maddox said in an interview with Bloomberg TV on Monday. “Our systems are in place. Our people are in place. Our story is crisp. We are ready to go.”

On Monday, the company announced a partnership with The Diary of a CEO podcaster Steven Bartlett. Maddox said creators like Bartlett will be a new source of growth over the next decade as Authentic brings its model for increased product licensing and live events to the influencer community.

Authentic generates $1.8 billion in EBITDA on $2.2 billion in revenue, an extraordinarily high 81% profit margin, Maddox said. International markets account for about 35% of revenue. The company generates royalties of about 6% to 7% on sales of merchandise manufactured by others and as such doesn’t have any inventory expenses or capital investments. The business is growing between 7% and 8% organically and 24% when acquisitions are included, Maddox said.

Authentic has spent $2 billion on deals over the past 18 months, including the Guess? Inc. and Care Bears brands. Authentic has $10 billion of intellectual property, a figure he’d like to double over the next 24 months. Entertainment properties make up about 20% of the company’s revenue. Maddox, the former CEO of casino operator Wynn Resorts Ltd, was elevated to the chief executive spot at Authentic earlier this year.