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NEW YORK CITY-Aether Holdings Inc. has entered into a definitive agreement to acquire the Athlete’s Foot for $51.5 million. The acquisition includes the Athlete’s Foot athletic footwear and apparel franchise system, with more than 575 locations in 40 countries.

Under the terms of the agreement, Aether will pay at closing through a combination of cash and the issuance of Aether common stock, less any assumed debt. Aether also agreed to an earn-out arrangement that will entitle the seller to receive up to an additional $8.5 million of cash and stock, if the Athlete’s Foot’s financial results for the year ended Dec. 31, 2006 meet certain specified targets.

This transaction follows the Aether’s June 2006 acquisition of UCC Capital Corp., which provided the company with a platform from which to begin implementing a new intellectual property strategy focused on brand acquisition and management.

Aether intends to start doing business as NexCen Brands Inc., which is more indicative of the company’s new business focus, says Robert W. D’Loren, Aether’s president and chief executive officer. Once the transaction is complete by year’s end, Robert J. Corliss, president and CEO of the Athlete’s Foot will continue with Aether as president and CEO of the NexCen Franchise Brands Inc.

The news comes just days after the competitor Foot Locker announced it had hired investment-banking firm Evercore Partners to assist in exploring strategic alternatives.

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