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Carter's to buy children's apparel retailer Bonnie Togs
22
Jun '11
Carter's Inc, the largest branded marketer in the United States of apparel exclusively for babies and young children, announced that it has entered into a definitive agreement to acquire Bonnie Togs, a children's apparel retailer based in Toronto, Canada, for total consideration of up to approximately $98 million.

Bonnie Togs is a Canadian specialty retailer focused exclusively on the children's apparel and accessories marketplace. Bonnie Togs generated net sales in the twelve-month period ended May 2011 of approximately CAD $100 million, which reflects an increase of approximately 30% over the previous twelve-month period. Bonnie Togs operates 59 retail stores in Canada and sells products under the Carter's and OshKosh B'gosh brands, as well as other private label and national brands.

Bonnie Togs has been Carter's principal licensee in Canada since 2007 and is the Company's most significant international licensee. In addition to its 37 Bonnie Togs branded retail stores, Bonnie Togs also operates 22 Carter's/OshKosh B'gosh stores, which offer consumers these leading U.S. children's apparel brands in one convenient location.

The acquisition of Bonnie Togs is expected to be accretive to Carter's fiscal 2011 adjusted earnings per share, excluding the impact of non-recurring purchase accounting-related charges.

“The acquisition of Bonnie Togs is an important component of our long-term strategy to extend the reach of our Carter's and OshKosh B'gosh brands to consumers in international markets,” said Michael D. Casey, Carter's Chairman and Chief Executive Officer. “We are excited to add this successful, high-growth retail business and experienced management team to our company. We see significant potential for growth in Canada, with an opportunity to operate approximately 160 stores contributing total annual revenues of more than $200 million by 2016.”

“We are very excited to join Carter's and to jointly pursue the significant growth opportunities we see ahead in Canada,” said Paul Rubinstein, President of Bonnie Togs. Rubinstein will become Senior Vice President and Market Leader of Canada for Carter's upon completion of the transaction.

Terms and Financing of the Transaction

The transaction will be structured as an acquisition by Carter's of all of the outstanding stock of the legal entities comprising the Bonnie Togs business. The total purchase price is comprised of a cash payment upon closing of the transaction of approximately $62 million. The balance of the purchase price, or approximately $36 million, is payable upon attainment of certain earnings objectives over a four-year measurement period. The final purchase price is subject to a working capital adjustment. The transaction is expected to close within the next 45 days.

Carter's, Inc. is a leading provider of apparel and related products exclusively for babies and young children. The Company owns the Carter's and OshKosh B'gosh brands, two of the most recognized brands in the marketplace.

Carter's Inc


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