PE Keeps on Sewing Up Exits

The Blackstone Group and Vestar Capital Partners have completed their $350 million sale of Gold Toe Moretz to Gildan Activewear (NYSE: GIL). Gold Toe Moretz supplies athletic, casual and dress socks under the Gold Toe, Silver Toe, GT, Auro, PowerSox and All Pro brand names. The company is also the exclusive U.S. licensee for Under Armour and New Balance branded socks. Blackstone formed the company in 2006 by merging Gold Toe Investment, then majority owned by Vestar, and Moretz.

Since the beginning of 2007, PE investors have exited 36 companies engaged in the Apparel & Accessories industry, according to the PitchBook Platform. Exit activity has slowly been picking up since 2008 with 6 completed exits in 2008, followed by 7 in 2009 and 8 in 2010. With 4 deals already under its belt, 2011's pace appears to be in line with this upward trend. Overall, PE investors have largely favored sales to corporations when offloading investments in the industry, as the method accounted for 62% of the 37 exits completed within the time period. During each year from 2007 to 2009, sales to corporations was also the most popular exit method. However, last year, sales to other PE investors gained some steam, picking up half of the activity and clinching the number one spot. Whether or not it will keep it remains to be seen.