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Delta Apparel acquires Gekko headwear business
02
Apr '09
Delta Apparel Inc announced that it has acquired substantially all of the assets of Gekko Brands, a premier supplier of licensed and decorated headwear sold under the brands of The Game and Kudzu.

Under the new wholly-owned subsidiary, To The Game, LLC, Delta Apparel, Inc. will continue the business of providing innovatively designed, high quality headwear. The Game and Kudzu have extensive license agreements including most major colleges and universities, motorsports properties, Churchill Downs, and various resort properties.

The Game was founded in 1986 as a premier headwear supplier to colleges and universities. Its founder, Neil Stillwell, remains a vital and active leader in the business. The Kudzu brand was formed in 1993 to design, import and sell headwear and jackets to NASCAR teams just as The Game had done for colleges.

Prior to the acquisition, Gekko Brands was owned by Ashworth, LLC and Kurt Salmon Associates Capital Advisors served as Ashworth's financial advisor in connection with the sale. To The Game will continue to be headquartered in Phenix City, Alabama and all current operations will remain in place. The business employs approximately 120 people, all of whom will be retained as employees after the acquisition.

Robert W. Humphreys, President and CEO, commented, “We look forward to the addition of The Game and Kudzu brands to Delta Apparel, Inc. The purchase of this business is in keeping with our strategy of acquiring brands, licensed properties, and operating companies that expand our channels of distribution, giving us additional platforms for growth.

We believe these brands, combined with the sourcing, marketing, art, and distribution skills of the management team, will provide significant growth opportunities in concert with our current business units. All of us at Delta Apparel look forward to working with the existing management team as they continue to build The Game and Kudzu.”

The Company purchased associated inventory, accounts receivables, and fixed assets of the business, and assumed certain liabilities. No goodwill or intangibles are expected to be recorded on the Company's financial statements in connection with the acquisition. The Company financed the purchase price through its asset-based secured revolving credit facility.

In conjunction with the acquisition, the Company exercised its $10 million accordion feature under its existing credit facility, bringing the total line of credit to $110 million, subject to borrowing base limitations. Delta Apparel expects To The Game, LLC to add approximately $27 million in annual sales to its business and be marginally profitable, with opportunities for improved profitability in the future.

Deborah H. Merrill, Vice President and CFO commented, “With the increase in our credit facility, we were able to acquire the business while improving our overall liquidity. While obtaining financing is more difficult in these economic times, we were able to complete this transaction without changing the underlying pricing in our credit facility. We appreciate the support of the financial institutions in our endeavors to grow our business.”

Delta Apparel Inc


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