HanesBrands to Acquire DB Apparel
Yesterday, HanesBrands, Winston-Salem, N.C, a leading marketer of everyday basic apparel under world-class brands, announced that it intends to acquire DBApparel of France from Sun Capital Partners Inc., provided consultation with European and French works councils representing DBA employees is completed and customary closing conditions are met.
DBA is a leading marketer of intimate apparel, hosiery and underwear in Europe, new geography for Hanes. The all-cash transaction would be accretive to adjusted earnings per share in the first 12 months after closing, including an estimated $0.25 of adjusted EPS excluding actions in 2015. With the realization of full benefits in three to four years, the acquisition would add, on an annual basis, more than $875 million in net sales, approximately $125 million in adjusted operating profit excluding actions, and approximately $1.00 in adjusted EPS excluding actions.
Hanes' transaction offer values DBA at €400 million on an enterprise basis (approximately $550 million at current exchange rates), or approximately 7.5 times EBITDA. Hanes intends to fund the acquisition with cash on hand and third-party borrowings. The post-synergy multiple is expected to be less than 4 times EBITDA. The acquisition could close as soon as the third quarter 2014.
Hanes and DBA were formerly separate sister companies under the ownership of Sara Lee Corporation. In 2006, Sun Capital acquired DBA and Hanes spun off into an independent public company. Together, the two companies would be one of the largest basic innerwear apparel companies in the world and share the worldwide rights to the Playtex, Wonderbra and DIM brands.
"Purchasing DBApparel would represent another great acquisition for Hanes and a good use of our ample cash flow to generate significant shareholder value," said Richard A. Noll, chairman and chief executive officer for Hanes. "We will be able to reunite two great companies to create significant growth and margin-expansion opportunities. Together, we will be a nearly $6 billion company utilizing our disciplined Innovate-to-Elevate strategy and leveraging our global supply chain."