Gaiam sells off consumer-products business, rebrands as Gaia

LOUISVILLE – Fitness and lifestyle company Gaiam Inc. (Nasdaq: GAIA) announced Tuesday that it is selling its branded consumer products business to focus on its streaming media segment, while also rebranding the company to Gaia Inc.

The move comes as a major shift in strategy for the Louisville-based company, which two years ago had announced plans to spin off the media segment, known as Gaia (and formerly as Gaiam TV), into a separate publicly traded company.

New York-based Sequential Brands Group Inc. (Nasdaq: SQBG) and operating partner Fit For Life LLC have agreed to pay Gaiam $167 million in cash for the branded consumer products business, which includes yoga, fitness and other wellness products under the Gaiam and SPRI brands.

Gaiam officials could not immediately be reached for comment.

In a press release, Gaiam officials said the company would use a portion of the proceeds to buy back about $90 million-worth of the company’s Class A common stock and vested stock options at a price of $7.75 per share, $1.04 more than Tuesday’s closing price. The remaining proceeds will be used to fund growth and development of the lifestyle streaming media business, which is now Gaiam’s sole focus.

The deal has been approved by Gaiam’s board of directors and is expected to close in June. The announcement of the deal comes just days after Gaiam announced it had sold its 51.4 percent stake in adventure travel business Natural Habitat Inc. for $12.85 million.

Gaiam officials said Tuesday that, if the sale of the branded products business does not close as expected, the company would instead proceed with the spinoff of Gaia.

“Given a number of precipitating factors, the board of directors determined and unanimously agreed that in terms of maximizing shareholder value and providing Gaia the greatest opportunity for success, the divesture of these two businesses presents the best strategic alternative for Gaiam and our shareholders,” Gaiam chairman Jirka Rysavy said in the release.

Sequential Brands Group officials said Gaiam’s consumer products business would integrate “seamlessly” into Sequential’s Active Division, which is anchored by the And1 and Avia brands.

Gaiam also on Tuesday reported a first-quarter net loss of $7.6 million, or 31 cents per share, compared to a loss of $3.9 million, or 16 cents per share, for the same period last year. Revenue for the quarter was $35.3 million, down from $37.6 million a year earlier.

The company had previously reported an $11 million loss for the full 2015 fiscal year, with revenue of $188 million.

on Facebook on LinkedIn