Winston-Salem, NC–HanesBrands Inc. said today that it intends to buy Knights Apparel for $200 million from Merit Capital Partners, a private equity firm.
It would be the latest acquisition by the apparel and hosiery giant which has seen its profits soar with the purchases of Maidenform and DBApparel. In January, HanesBrands reported its fourth quarter profit rose 49% helped by its recent acquisitions.
“This is an exciting acquisition opportunity to leverage our existing Gear for Sports licensed collegiate apparel business, our expertise and size in the mass retail channel, and our low-cost global supply chain,” HanesBrands Chairman/CEO Richard A. Noll said. “Combining the two companies is a great way to create value.”
With the addition of Knights, Hanes expects to be an even stronger growth partner for licensed and graphic apparel with more than $450 million in combined annualized sales. “The combination will create a best-in-class supplier of licensed collegiate apparel that has both low-cost and quick-turn supply capability and is primarily supported by company-owned garment production and graphic embellishment facilities,” the company said.
Founded in 2001, Knights has approximately 210 employees with primary offices and a distribution center located in Spartanburg, S.C. The company buys all of its apparel from outsourced contractors and sends those garments to outsourced embellishment facilities. The integration of the Knights business into Hanes’ supply chain should yield significant savings and efficiencies.
HanesBrands, which announced a plan in January to split its stock, said the deal is expected to add about 10 cents a share to pre-split earnings excluding items in 2015.
In connection with the transaction, Joe Bozich, Knights Apparel’s ceo, will continue with HanesBrands in his leadership role for the business across retail channels.