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HanesBrands completes acquisition of DBApparel
04
Sep '14
NYSE-listed HanesBrands, one of the largest innerwear apparel companies in the world said it has completed acquisition of European marketer of intimate apparel, hosiery and underwear – DBApparel for €400 million.

Hanes said it will immediately begin cross-company integration planning, in order to drive significant value creation and synergy potential by applying Hanes’ Innovate-to-Elevate strategy in Europe and leveraging its global supply chain that primarily relies on self-owned production.

The acquisition of DBA from Sun Capital Partners is expected to be immediately accretive to adjusted earnings in 2014 and is expected to add approximately $1.00 of adjusted EPS within three to four years.

Hanes and DBA were formerly separate sister companies under the ownership of Sara Lee Corporation. In 2006, Sun Capital acquired DBA and HanesBrands spun off into an independent public company.

According to Hanes, the year-end holiday season is DBA’s strongest earnings period with September through December typically generating approximately a third of annual sales but approximately half of annual operating profit.

Hanes expects to benefit in 2014 by only incurring one-third of a year’s interest expense for financing the DBA acquisition while gaining a larger proportion of annualized profit performance during the seasonally strong holiday period.

The purchase of DBA is Hanes’ second major acquisition in its core innerwear categories in the past year, making it one of the largest innerwear companies in the world.

Maidenform, a leading seller of bras, shapewear and panties in the United States under brands such as Maidenform and Flexees, was acquired in October 2013.

By contrast, DBApparel is a leading seller of bras, hosiery and underwear primarily in Europe under such strong European consumer brands as DIM, Playtex, and Wonderbra.

“Combining DBA’s brands, product development capabilities and talented employees with HanesBrands’ innovation, supply chain and talented employees makes our company a true international powerhouse in innerwear apparel,” HanesBrands said.

HanesBrands CEO Richard said, ““DBA will immediately contribute to our financial results, and the purchase price of approximately 7½ times EBITDA represents an excellent use of our free cash flow to generate significant shareholder value.” (AR)

Fibre2fashion News Desk - India

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