HanesBrands to Acquire Collegiate Logo Apparel Company
HanesBrands Inc., Winston-Salem, N.C., yesterday announced that it has entered into a definitive purchase agreement to acquire Knights Apparel, a seller of licensed collegiate logo apparel in the mass retail channel. The acquisition, which is subject to antitrust review and other customary closing conditions, is expected to close early in the second-quarter 2015.
Knights Apparel sells T-shirts, sweatshirts and other sports apparel with college logos and graphics, primarily to mass merchant retailers. Knights sells apparel representing 400 of the largest U.S. colleges and universities, while Hanes' Gear for Sports division is already a leading seller of licensed collegiate apparel in university bookstores, utilizing the company's strong brands, company-owned apparel production, and company-owned graphic attribution and embellishment facilities.
Hanes is purchasing Knights, which is forecast to have sales of approximately $180 million for the full-year 2015, from affiliates of Merit Capital Partners. The all-cash transaction values Knights at approximately $200 million on an enterprise-value basis, or approximately eight times expected full-year 2015 EBITDA.
"This is an exciting acquisition opportunity to leverage our existing Gear for Sports licensed collegiate apparel business, our expertise and size in the mass retail channel, and our low-cost global supply chain," said HanesBrands chairman and CEO Richard A. Noll. "Combining the two companies is a great way to create value."
With the addition of Knights, Hanes expects to be an even stronger growth partner for licensed and graphic apparel, with more than $450 million in combined annualized sales. The combination will create a best-in-class supplier of licensed collegiate apparel that has both low-cost and quick-turn supply capability and is primarily supported by company-owned garment production and graphic embellishment facilities.