NexCen Brands acquires Great American Cookie Co.

Global brand management company NexCen Brands, Inc. (Nasdaq: NEXC) said after Tuesday’s close that it has acquired the Great American Cookie Company from Mrs. Fields Famous Brands for $93.7 million and upwardly revised its earnings guidance due to the acquisition.

NexCen said it expects this transaction to be accretive beginning in 2008 and that forward 12-month revenues and operating income are expected to be $27 million and $14 million, respectively. Revenues and operating income for the Great American Cookie Company were approximately $26 million and $13 million, respectively for the 12 months ended Dec. 31, 2007. 

“Factoring in financing and deal costs, this transaction should add approximately $0.10 to EPS on an annualized basis,” Lazard Capital Markets analyst Todd Slater wrote in a research note today. Slater projects that Great American Cookie will add approximately $25 million to revenue and roughly $13 million to earnings before interest and taxes in 2008.

On account of the acquisition, the New York-based company said it now expects 2008 EPS to range from $0.27 to $0.30. Previously, the firm was expecting full-year EPS of $0.19 to $0.21 per share, assuming no additional acquisitions. The consensus of three analysts polled by Thomson Financial is for earnings of $0.21 per share for the full year.

“We believe the consensus 2008 EPS estimate is too low and will continue to rise
(approaching our Street-high estimate of $0.43) as NexCen continues to add properties to its portfolio over the course of the year,” wrote Slater. The analyst has a “buy” rating on the stock with a target price of $18 per share. 

---You can read the FULL article when you register (registration is free!) or sign-in to SmallCapInvestor.com---