HanesBrands, a leading worldwide marketer of underwear, intimate apparel and activewear in the Americas, Europe and Asia, is all set to acquire an Australia-based underwear and intimate apparel company Pacific Brands.
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The transaction is valued at US $ 800 million (on an enterprise-value basis) and is expected to be immediately accretive to adjusted earnings per share and deliver an after-tax internal rate of return in the mid-teens. It is projected to deliver full benefits within three years, attaining adjusted operating profit of approximately US $ 100 million, contributing approximately US $ 0.25 to Hanes’ adjusted EPS, the company said in a release.
Commenting on the acquisition, Richard A. Noll, Hanes Chairman & CEO said, “Pacific Brands is a natural addition to the HanesBrands portfolio with its strong market-leading brands that will be complemented by our global supply chain. In the span of 10 years, we have transformed the company through acquisitions and our Innovate-to-Elevate initiatives. We have tripled operating profits and expanded from a $4 billion company concentrated in the United States to a US $ 7 billion global underwear and activewear powerhouse spanning the Americas, Europe and Asia-Pacific. This foundation will serve as a catalyst for even further growth and value creation for the foreseeable future.”
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Hanes will most probably hold on to the senior management team of Pacific Brands to run the business post acquisition, which is expected to result in significant savings through the use of Hanes’ large-scale, low-cost global supply chain. The acquisition also would add to Hanes’ global product design, development and innovation capabilities that span the Americas, Europe and the Pacific Rim.
