US-based brand acquisition and management company Aether Holdings, Inc. has entered into a definitive agreement to acquire American athletic footwear and apparel franchisor The Athlete's Foot.

Aether will pay $51.5 million at closing through a combination of cash and the issuance of common stock, less any assumed debt. The company has 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 (in the same proportion as the initial consideration), if The Athlete's Foot's financial results for the year ended December 31 meet specified targets. Aether has also agreed to enter into employment arrangements with certain key executives of The Athlete's Foot. The transaction is expected to close before the end of 2006.