Sharpening its focus on non-apparel verticals, Virginia-based Ennis Apparel has entered into a Unit Purchase Agreement with Alstyle Operations, wherein it will sell Alstyle Apparel LLC and its subsidiaries, which constitute the Company’s apparel division, to Alstyle Apparel in a transaction worth US $ 88 million. The purchase price includes US $ 76 million in cash to be paid at closing, subject to working capital adjustments, and an additional US $ 12 million to be paid pursuant to a capital lease covering certain Company retained equipment utilized by the Apparel Division.
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The closing of the Transaction, which is anticipated to occur by the end of April 2016, is conditioned upon the funding of a committed acquisition loan in favour of the Buyer, expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the satisfaction of other customary closing conditions. As part of the Transaction and following the closing, the company will provide transition assistance to the Buyer for certain administrative, financial, human resource and information technology matters for a period of up to 18 months and will sublease from the Buyer a portion of a certain property located in Anaheim, California that is leased by the Apparel Division.
Keith Walters, Chairman, Chief Executive Officer & President, Ennis Apparel commented by stating, “Given our strategic direction to focus on the further expansion of our Print Segment, the Apparel Segment was deemed to be a non-core asset. The sale of this non-core asset allows us to fully focus on our core business segment and to be able to utilize the cash from the sale of Alstyle Apparel to further expand this business segment through strategic acquisitions, through which we have been able to continually demonstrate excellent returns to our shareholders.”
