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Waverly Ready to Work as a NexCen Brand

Waverly licensees are preparing for a new working relationship with NexCen, the brand management and acquisition firm that plans to acquire the Waverly brand from F. Schumacher & Co.

NexCen will pay $36.75 million in cash and issue 50,000 warrants priced at closing to acquire the Waverly name.

"I think it's a positive for the brand and the licensees," said Budd Goldman, Ellery Homestyles' ceo, Waverly Home Fashion Division. Ellery produces bedding, window and other textiles under the Waverly license. "They will invest in building the brand to a higher level," Goldman added.

Ron Kaufmann, ceo of decorative fabric licensee P/Kaufmann agreed, "NexCen is fully committed to furthering the value of this brand."

Robert D'Loren, president and ceo of NexCen, said the company will use the acquisition to establish a strong presence in the home design sector.

"Waverly has an outstanding team of home products designers and licensing professionals that can excel in our operating structure by supporting and growing the Waverly brand. NexCen can build upon their expertise and the current Waverly licensee base to more fully develop our Bill Blass home business and future brands that we intend to acquire," said D'Loren.

The Bill Blass brand is making a re-entry into the home furnishings field after several years' absence. Town & Country signed a license with the brand last year prior to Blass's acquisition by NexCen, and will launch bedding and bath product at the New York Home Fashions Market in August.

NexCen estimates that the Waverly brand will generate approximately $8 million in royalty revenue and approximately $.07 cents per share of incremental EPS in the first 12 months following the acquisition. Assuming the acquisition is completed by the end of April, NexCen estimates the Waverly brand will contribute approximately $.04 per share of incremental EPS in the current fiscal year.

Last week, NexCen said that it expects to amass 2007 sales of $38 million to $42 million, again assuming the Waverly deal closes by the end of April and it makes no other acquisitions this year.

NexCen projected earnings per share for the twelve months beginning May 1, 2007 of $0.19 to $0.21 per fully diluted share.

For the 12 months ended Dec. 31, 2006, NexCen reported royalty revenues of just under $1.2 million, franchise fees of $749,000 and total revenues of $1.9 million. The company posted an operating loss of $8.5 million for the year.

Waverly is just the latest in a string of acquisitions made by NexCen in the past eight months — and it appears the company intends to keep up the pace.

A day before announcing the Waverly buy, NexCen unveiled a master loan agreement with BTMU Capital Corporation that will allow the brand house to borrow up to $150 million for strategic acquisitions.

Last June, the company — then named Aether Holdings — acquired UCC Capital Corp., an equity investment firm that also structures financing for intellectual property deals. Aether, then operating as a mortgage-backed securities business, changed its name following the transaction.

Today, NexCen has a position in retail franchising, consumer branded products, and quick service restaurant franchising.

In recent months, NexCen has acquired the Bill Blass brand and The Athlete's Foot international franchise, as well as MaggieMoo's International and Marble Slab Creamery Inc., both established brand franchisors in the hand-mixed premium ice cream category

NexCen's strategy is to generate royalties at wholesale and retail and through its owned channels "without the loss of sales in third-party channels," according to the company.

D'Loren said last November that the company would move to "quickly assemble a portfolio of recognizable consumer and franchise brands which will give us the opportunity to create value for our shareholders.