Embattled apparel maker Hanesbrands is set to end its nearly 20-year chapter as an independent company. The new owner writing the final line of this part of the story is not a PE firm, but another public company.
Montreal-based t-shirt maker Gildan Activewear has agreed to buy Hanesbrands in a cash-and-stock transaction that values the company’s equity at $2.2 billion. The deal has an enterprise value of $4.4 billion when including Hanesbrands’ debt.
For Hanesbrands shareholders, that translates to roughly $6 a share, a premium of about 24% to the company’s closing price on Aug. 11, according to a statement released Wednesday.
Hanesbrands in May sat at the top of a PitchBook “take-private” watchlist featuring apparel brands seen as likely acquisition targets. The company had a 3.46% likelihood of being taken private within 18 months, based on a proprietary PitchBook model.
While the iconic American underwear maker ultimately did not fall into the hands of a buyout shop, both parties crossed paths with PE funds in recent years. Gildan had looked into selling itself through a take-private deal, drawing interest from financial buyers including Bain Capital and Sycamore Partners. The sale process was halted last year amid a shareholder battle that reshuffled its board. Meanwhile, Hanesbrands sold its sportswear label Champion to PE-backed Authentic Brands last year for $1.2 billion as part of its effort to reduce debt.
The merger could face antitrust challenges, as both companies are North American apparel producers with similar product lines and share overlapping distribution channels and wholesale partners, according to a Morningstar analyst note.
Goldman Sachs, Evercore, Jones Day and Blake, Cassels & Graydon advised Hanesbrands on the deal. Gildan was advised by Morgan Stanley, CIBC Capital Markets, Sullivan & Cromwell and Stikeman Elliott, while Morgan Stanley Senior Funding and CIBC provided fully committed financing.
Featured image by SOPA Images/SOPA Images/LightRocket via Getty Images
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