FSIC helps Sequential close Martha Stewart purchase

Sequential Brands, a US holding company that owns a portfolio of consumer brands, increased its credit lines with the Franklin Square Investment Corporation (FSIC) business development companies (BDCs) by $150 million to $368 million this week. The new loan finances Sequential’s acquisition of the Martha Stewart Living Omnimedia (MSLO) brand.

The credit facility is a first lien loan that pays LIBOR + 800-875 basis points with no floor. Sequential also has a revolver facility in place with Bank of America.

Franklin Square and GSO Capital Partners, which sub-advises the BDCs, have invested in Sequential since mid-2014, according to Brad Colman, principal at GSO. FSIC’s first credit to the company was a $90 million second lien loan that went toward Sequential’s acquisition of Galaxy Brand Holdings last year. Galaxy, another branding and distribution company, was then owned by The Carlyle Group. Sequential also announced it was buying stakes in the Joe’s Jeans and Jessica Simpson brands this year. These transactions were also financed through FSIC credit facilities, said Colman.

Sequential Brands owns, promotes, markets and licenses a portfolio of consumer brands in the fashion, sports and lifestyle categories in the US and internationally. Other brands it owns include Ellen Tracy, Avia and Revo. The company is publicly traded on the NASDAQ stock exchange.

Capital for the Sequential deals was drawn from across the three Franklin Square BDCs. FSIC is a publicly traded BDC, while FSIC II and III are private. The BDCs have $15 billion under management overall, while Blackstone-owned GSO, which oversees loan origination on the vehicles, handles $80 billion across its private debt platform, which includes the BDCs, private closed-end funds, hedge funds and CLOs.