DISCLOSEABLE TRANSACTION ASSET PURCHASE AGREEMENT IN RELATION TO THE ACQUISITION OF PS BRANDS  

Global Brands Group Holding Limited 

(Incorporated in Bermuda with limited liability) (Stock Code: 787) 

On 5 November 2015, GBG USA, an indirect wholly-owned subsidiary of the Company, entered into the Asset Purchase Agreement with PS Brands, the Members and the Stockholder to acquire from PS Brands the Business for a cash consideration of (i) an initial amount of approximately US$33.6 million (approximately HK$262.1 million) and (ii) a performance-based contingent amount of up to US$96.4 million (approximately HK$759.1 million). In any event, the total consideration of the Acquisition shall not exceed US$130 million (approximately HK$1,014 million). 

THE ACQUISITION On 5 November 2015, GBG USA, an indirect wholly-owned subsidiary of the Company, entered into the Asset Purchase Agreement with PS Brands, the Members and the Stockholder to acquire from PS Brands the Business for a total consideration not exceeding US$130 million (approximately HK$1,014 million). The Business being acquired concerns the designing, developing, sourcing, importing, marketing, selling and distributing licensed, branded and private label hosiery products. To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, PS Brands, the other parties to the Asset Purchase Agreement and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons. The Consideration, to be financed from the Group’s internal cash and long term financing from banks, was determined after arm’s length negotiations between GBG USA and PS Brands taking into account various factors, including but not limited to the historical sales from the Business and expected future prospects of the Business, and the reasons for and benefits of the transactions as contemplated under the Asset Purchase Agreement. The Consideration comprises: (a) an initial amount of approximately US$33.6 million (approximately HK$262.1 million) to be paid in part on the Closing Date and in part after the Base Year EBITDA is finally determined; and (b) a performance-based contingent amount of up to US$96.4 million (approximately HK$751.9 million) payable in annual instalments for each of the years ending 31 December 2016 to 2020 and to be primarily determined on the basis of whether the Adjusted EBITDA in the relevant year meets or exceeds the Base Year EBITDA. PS Brands may elect to extend the contingent payment period by 12 months if it has not previously been entitled to receive the full amount of the contingent payment. In any event, the total consideration will not exceed US$130 million (approximately HK$1,014 million), payable in cash.  

PS Brands, trading as “Planet Sox”, is recognized as a leading hosiery company with a number of licensed and owned brands across multiple categories including socks, legwear, baby shoes and related accessories. Its portfolio of licenses includes Disney, Nickelodeon, Hasbro, Fila, Head Sport, Kate Spade, Nanette Lapore, and Kensie. It distributes products across multiple channels of distribution, including mid-tier and better department stores, mass market accounts, athletic footwear chains, specialty stores and off-price retailers. 

The Business is managed by the Stockholder who is the president and chief executive officer of PS Brands. 

The Members are all the shareholders of PS Brands. 

The profits before and after tax attributable to the Business for the year ended 31 December 2014 based on unaudited management accounts were approximately US$8.7 million (approximately HK$67.9 million) and US$8.6 million (approximately HK$67.1 million), respectively. 

The corresponding figures for the year ended 31 December 2013 were approximately US$7.9 million (approximately HK$61.6 million) and US$7.8 million (approximately HK$60.8 million), respectively. The net sales attributable to the Business for the years ended 31 December 2014 and 2013 were approximately US$100.2 million (approximately HK$781.6 million) and US$83.4 million (approximately HK$650.5 million) respectively. The value of the net assets attributable to the Business as at 31 December 2014 was approximately US$8.7 million (approximately HK$67.9 million), based on unaudited management accounts. The above accounts were prepared in accordance with US GAAP. 

“Members” Consolidated Children’s Apparel Inc., a New York corporation, BigStar Holdings, LLC, a Delaware limited liability company, E & E Hosiery, Inc., a New York corporation, being all the shareholders of PS Brands “PS Brands” PS Brands, LLC, the seller under the Asset Purchase Agreement.

"Stockholder” Elie Levy, the president and chief executive officer of PS Brands   

By Order of the Board Global Brands Group Holding Limited 

William FUNG Kwok Lun Chairman Hong Kong, 6 November 2015 

Websites: www.globalbrandsgroup.com  www.irasia.com/listco/hk/gbg