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Iconix Brand Group Inc. said it agreed to buy Rocawear lifestyle apparel brand co-founded by Shawn Carter, the entertainer known as Jay-Z, for $204 million in cash, and raised its 2007 earnings outlook.

Iconix said it now expects 2007 earnings of 96 cents to $1 a share, up from its earlier view of 87 cents to 92 cents a share. Revenue is expected to be $150 million to $160 million in 2007, the company said while announcing quarterly results. For 2007, analysts on average were expecting Iconix to earn 92 cents a share, before special items, on revenue of $139.1 million, according to Reuters Estimates.

Iconix, the owner of brands such as Joe Boxer and Candie's, said the acquisition of Rocawear brand, to diversify its portfolio of brands, also includes an additional $35 million future performance-based stock payment.

The brand management company said in a statement that it expects Rocawear to generate about $43 million in royalty revenue in the first 12 months under its fold.

Carter will continue to be chief creative officer of the brand, which has annual sales of over $700 million, it said.

He will retain his stake in the operating company and his two partners, Alex Bize and Norton Cher, will continue to run the company and enter into a long-term license agreement with Iconix for the core young men's apparel category.

As part of the deal, Iconix will also enter into a separate joint venture with Carter, to establish a new brand management and licensing company to identify brands to be acquired or developed.

SOURCE: Reuters.com