Gildan Announces Agreement to Acquire Gold Toe Moretz for Approximately $350 Million
Gildan Activewear believes that the combination of the competitive strengths of the two companies, and continued support for the further development of Gold Toe Moretz's owned and licensed brands, will create a strong platform for further organic sales growth in socks and other retail product categories. In addition, Gildan Activewear currently expects to be able to achieve $10-$15 million of annualized cost synergies, which would be gradually realized over the next 24 months.
There are no material conditions precedent to the closing of the transaction and the acquisition by Gildan Activewear of Gold Toe Moretz is expected to close imminently. The acquisition will be financed out of the company's cash balances and the utilization of its revolving bank credit facility.
"Our management and board of directors believe that the acquisition by Gildan of Gold Toe Moretz represents an attractive use of our capital as it is expected to generate a return on investment in excess of our risk-adjusted cost of capital and be immediately accretive to EPS," said Laurence G. Sellyn, Gildan Activewear's executive vice president, chief financial and administrative officer. Gildan Activewear will update its financial outlook for fiscal 2011, including the impact of the acquisition of Gold Toe Moretz, when it reports its results for its second fiscal quarter on May 11, 2011.
For more information, visit www.gildan.com.