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Tailored Brands closes sale of corporate apparel business

Aug '19
Pic: Tailored Brands
Pic: Tailored Brands
Tailored Brands has closed sale of its corporate apparel business to a group led by existing corporate apparel UK executive team for total cash consideration of $62 million, subject to certain working capital adjustments. Of the $62 million, approximately $56 million was received upon closing and $6 million is deferred to the first quarter of fiscal 2020.

"We are pleased to have reached an agreement to sell our corporate apparel business. The consummation of this transaction supports our previously stated strategy to focus on our core retail business in the US and Canada while reducing debt," said Tailored Brands president and CEO Dinesh Lathi in a company press release. "We thank the management team and employees for their many contributions and wish them well."

The company will use cash proceeds from the transaction to reinvest in its business in accordance with the provisions of its term loan. This will free up funds previously slated for capital expenditures for debt reduction. The transaction represents a multiple of 4.3 times fiscal 2018 adjusted EBITDA for the corporate apparel business, which had net sales of $235.4 million in fiscal 2018.

The company was advised on the transaction by Edwin Coe LLP and Vorys, Sater, Seymour and Pease LLP. Houlihan Lokey, Inc served as financial advisor to the Tailored Brands board of directors.

Tailored Brands is a leading specialty retailer of men's tailored clothing and largest men's formalwear provider in the US and Canada. It serves its customers through an expansive omni-channel network that includes over 1,400 locations in the US and Canada as well as our branded e-commerce websites. (PC)

Fibre2Fashion News Desk – India

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