The company has agreed to acquire the privately held Champion Europe, based in Italy, in an all-cash transaction. The purchase price will be 10 times the actual calendar 2016 earnings before interest, taxes, depreciation and amortisation, subject to adjustment for cash, debt and working capital.
It intends to take advantage of its strong balance sheet to fund the acquisition with debt, consistent with its previously communicated capital allocation strategy.
Champion in Europe will be run as a division of the company's global Champion organisation. Sauro Mambrini, chief executive officer and president of Champion Europe, will remain with Hanes Brands to oversee Champion Europe operations.
“This acquisition coupled with the recent purchase of the Champion business from our licensee in Japan will unite the Champion brand globally and will give us a powerful platform for growth in every continent,” said Gerald Evans Jr, COO of Hanes.
“Sauro Mambrini and the highly capable management team of Champion Europe will be a great addition to our organisation,” he said.
“This is a great time to do an acquisition,” Richard Noll, Chairman and CEO of Hanes said. “Our overall business is trending as expected; our recent acquisitions are performing well; we have a vision for Champion as a global brand; and we feel good about delivering double-digit earnings growth in 2016 and for many years to come.”
The acquisition, which is subject to certain closing conditions, is expected to close mid-year 2016.
After the acquisition closes, Hanes will update its 2016 financial guidance to reflect the close timing, the outlook for Champion Europe and any currency considerations. (MCJ)
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