CafePress, the company that allows customers to design, buy and sell merchandise including t-shirts, hats, bags, mugs, stickers, and more, has entered into an agreement to acquire customized clothing seller Logo’d Softwear, Inc. The acquisition, which was noted in an amendment recently filed to CafePress, Inc.’s S-1, states that the agreement allows CafePress to purchase all the assets of Logo’d for $8.3 million, with $7.5 million in cash and $800,000 in shares of common stock.
Launched in 1999, CafePress filed its IPO papers back in June 2011. Last week, the company provided more details about its plans. CafePress took in $175.5 million in revenue last year, up 37% from $127.9 million in 2010.
4.5 million shares (2.5M from the company and 2M from selling shareholders) will be made available for $16-$18 each, raising between $72 million and $81 million. CafePress says it expects to receive about $36.7 million, after costs, which it plans to use for working capital and capital expenditures.
The company is now in an SEC quiet period, so it cannot comment on the details of the planned acquisition at this time. However, the amendment notes that the company expects to close the acquisition during the second quarter of 2012.
For background, Logo’d Softwear Inc. is the 17-year old company behind custom sportswear outlet LogoSportwear.com, as well as team uniform printers TeamSportswear.com, school apparel site Custom School Sportswear and a t-shirt print shop Custom T-Shirts Printed.
To date, nearly 4 million designs have been created online at the company’s properties. Like CafePress, Logo’d allows users to set up their own Share and Sell stores with zero cost and inventory management – it’s all print-on-demand.
CafePress currently has print productions facilities in Louisville, Kentucky, as well as in Portland, Oregon as a result of its acquisition of Canvas On Demand, LLC, and Raleigh, N.C., as a result of acquiring L&S Ventures, Inc. When and if the Logo’d deal completes, the company will be able to add additional facilities in Connecticut.
The key details from the S-1 read as follows:
In March 2012, we entered into an agreement to acquire substantially all of the assets of Logo’d Softwear, Inc., an e-commerce provider of personalized apparel and merchandise for groups and organizations. The asset purchase agreement provides for a total initial purchase price of $8.3 million, consisting of $7.5 million in cash and $0.8 million in shares of CafePress common stock priced as of the closing date, as well as contingent rights for the principal stockholder to receive up to $8.6 million in future performance-based cash consideration. In addition, in connection with, and upon closing of, the acquisition, the principal stockholder will receive CafePress stock options to purchase shares of our common stock with an aggregate value of up to $2.1 million, with vesting based on the achievement of certain performance milestones. The contingent right to future earn-out payments will expire either March 31, 2016, or June 30, 2016, depending on the closing date of the acquisition. The acquisition is anticipated to close during the second quarter of 2012, subject to obtaining the requisite approvals and other customary closing conditions. We may not be able to close this acquisition as planned or at all, and may be unable to successfully integrate this business or realize the anticipated benefits of the acquisition.