Gildan Announces Agreement to Acquire Anvil for Approximately U.S. $88 Million

Gildan Activewear Inc. today announced that it has signed a definitive agreement to acquire 100 percent of the common shares of Anvil Holdings Inc. (Anvil), parent company of promotional product supplier Anvil Knitwear, for a total purchase price of approximately U.S. $88 million. The acquisition will be financed by utilization of Gildan's bank credit facility. Gildan will not assume any of Anvil's currently outstanding indebtedness.

Anvil is a supplier of high-quality basic T-shirts and sport shirts for the printwear market. It has positioned itself as a supplier of high-value branded niche products within the U.S. distributor channel, including products such as Anvil Organic, Anvil Recycled and Anvil Sustainable. It has also increasingly established itself as a strategic supplier of basic apparel products which meet rigorous quality and social compliance criteria for major non-retailer brands.

For its fiscal year ended January 28, 2012, Anvil generated EBITDA of approximately U.S. $17 million on sales revenues in excess of U.S. $200 million. Gildan expects to generate significant acquisition synergies as a result of integrating Anvil's production for the printwear market into Gildan's low-cost vertical manufacturing, the integration of Anvil's U.S. and international distributor sales into Gildan's Printwear business, consolidation of purchasing of raw materials and other purchased cost inputs, the elimination of certain duplicate administrative functions, and savings in ongoing working capital requirements. The acquisition is expected to be immediately accretive. The projected EPS accretion, including synergies, is currently estimated to reach a run rate of approximately U.S. $0.20 per share in fiscal 2014, when the integration plan has been implemented. EPS accretion in fiscal 2013 is not currently expected to include any material impact of acquisition synergies.

The acquisition immediately provides Gildan with higher market share in the U.S. distributor channel, for the same investment that would be required to support the incremental sales revenues from the acquisition if they were generated through organic growth. Subsequent to the acquisition, Gildan intends to continue to pursue further sales growth in the printwear market, through leveraging the combined strengths of the two companies.