Drake performing live (and promoting OVO). Photo Credit: The Come Up Show
Authentic Brands Group (ABG) has purchased a majority stake in the IP of Drake’s October’s Very Own (OVO) apparel company, while Vince Holding Corp. is set to take the operational reins under a licensing agreement.
Authentic unveiled the high-profile play today, pointing first to its controlling interest in OVO. Though the buyer opted against divulging hard numbers – more on this in just a moment – it did note that “Drake will retain a significant ownership stake” and continue shaping OVO’s “creative vision.”
“Drake and his team have built something with incredible cultural influence,” Authentic founder and executive chairman Jamie Salter said in part. “We see a significant opportunity to take that even further, opening new markets, building new businesses and reaching more people around the world without losing what makes OVO, OVO.”
Next, the aforementioned “longstanding partner” Vince, as part of a $6 million deal for the operating business, is expected to oversee everything from OVO’s product design to its retail presence.
Why cut Vince in? Well, for one thing, Authentic possesses 75% of its, meaning Vince’s, own IP. Of course, Authentic’s non-music plays receive minimal industry coverage. But they’re certainly piling up; it was only last week that the company took a majority interest in the Care Bears IP, for instance.
Like Authentic, Vince (NASDAQ: VNCE) put out a brass-tacks release concerning the transaction. However, the publicly traded company also elaborated on the multifaceted deal with a presentation and a copy of the detail-oriented “Asset and Equity Purchase Agreement” itself.
According to the former resource, Vince owns 5% of the newly minted ABG OVO entity, against 51% for Authentic and the remaining 44% for Drake.
Unsurprisingly, there’s quite a lot to unpack in the other document, which describes, among plenty of different things, the minimum number of OVO retail locations that must be open per year, excluded concert merch, and Drake’s promotional obligations.
But perhaps most notably, the agreement identifies an “asset purchase price,” payable by Authentic Brands’ newly formed ABG OVO to Drake’s existing October’s Very Own IP Holdings, totaling a cool $117,647,058.82.
Bearing in mind the lawsuit that Applied Real Intelligence (ARI) submitted in late June over OVO’s alleged “multiple loan payment defaults,” the contract further compels Team Drake to submit “duly executed payoff letters and…releases with respect to all OVO Debt.”
Put another way, today’s transaction is good news for the relevant lender and for Drake himself, who reportedly securitized a bit of his music when dealing with ARI.
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