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Tuesday, February 7, 2023

Express (NYSE: EXPR) Confirm Strategic Partnership with WHP Global

Express, Inc. (NYSE: EXPR) officially confirmed a strategic partnership with WHP Global (WHP). This partnership aims to promote an Omni channel platform that will bring rapid, long-term growth through the acquisition and operation of a portfolio of brands. As per the collaboration, EXPR will create an intellectual property joint venture with WHP to acquire certain EXPR intellectual property.

At the same time, EXPR will turn into an Omni channel platform company upon transaction completion. The company will be controlled and operated by its current leadership. The company has also confirmed that after the transaction everything else about the current EXPR business remains the same.

Strategic Rationale

This transaction is supposed to bring numerous financial and operational benefits. This collaboration is expected to leverage EXPR’s strength as a fully integrated Omni channel platform. EXPR will utilize its platform to drive cost savings and margin expansion through synergistic M&A.

Furthermore, the company anticipates that this collaboration will speed up Express’s brand growth through licensing in non-core categories and international expansion by utilizing WHP’s expertise. EXPR will retain its disciplined capital deployment strategy and will collaborate with WHP to recognize intriguing, investable brand acquisition opportunities. The strategic alliance is anticipated to provide WHP with the best working platform, allowing it to expand its M&A pipeline.

Transaction Details

It has been confirmed that WHP will also make a common equity PIPE investment to buy 5.4 million newly issued shares of EXPR at $4.60 per share. Additionally, the intellectual property joint venture assumes a total value of the Express brand’s intellectual property of roughly $400 million. WHP owns 60% and the EXPR platform company owns 40%.

Furthermore, WHP will invest $235 million in the intellectual property joint venture. On the other hand, EXPR will contribute certain intellectual property assets in exchange for cash. The partnership agreement is likely to close in EXPR’s fourth fiscal quarter of 2022.

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