Gildan Activewear Inc. (TSX:GIL)(NYSE:GIL) today announced that it
has signed a definitive agreement to acquire 100% of the common
shares of Anvil Holdings, Inc. (Anvil) for a total purchase price
of approximately U.S. $88 million. The acquisition will be financed
by utilization of Gildan's bank credit facility. Gildan will not
assume any of Anvil's currently outstanding indebtedness.
Anvil is a supplier of high-quality basic T-shirts and sport
shirts for the printwear market. It has positioned itself as a
supplier of high-value branded niche products within the U.S.
distributor channel, including products such as Anvil Organic®,
Anvil Recycled® and Anvil Sustainable®. It has also increasingly
established itself as a strategic supplier of basic apparel
products which meet rigorous quality and social compliance criteria
for major non-retailer brands.
For its fiscal year ended January 28, 2012, Anvil generated
EBITDA of approximately U.S. $17 million on sales revenues in
excess of U.S. $200 million. Gildan expects to generate significant
acquisition synergies as a result of integrating Anvil's production
for the printwear market into Gildan's low-cost vertical
manufacturing, the integration of Anvil's U.S. and international
distributor sales into Gildan's Printwear business, consolidation
of purchasing of raw materials and other purchased cost inputs, the
elimination of certain duplicate administrative functions, and
savings in ongoing working capital requirements. The acquisition is
expected to be immediately accretive. The projected EPS accretion,
including synergies, is currently estimated to reach a run rate of
approximately U.S. $0.20 per share in fiscal 2014, when the
integration plan has been implemented. EPS accretion in fiscal 2013
is not currently expected to include any material impact of
acquisition synergies.
The acquisition immediately provides Gildan with higher market
share in the U.S. distributor channel, for the same investment that
would be required to support the incremental sales revenues from
the acquisition if they were generated through organic growth.
Subsequent to the acquisition, Gildan intends to continue to pursue
further sales growth in the printwear market, through leveraging
the combined strengths of the two companies.
Anthony Corsano, President and CEO of Anvil, will continue his
career with Gildan as a member of Gildan's senior management team.
Mr. Corsano will join Gildan's Branded Apparel division and focus
on the continuing development of Anvil's strategy to grow its
business of providing high-volume quality products for non-retailer
brands.
"We believe that the acquisition of Anvil and the combination of
the compatible cultures and strengths of our two companies will
position Gildan to further enhance our product offering for our
printwear customers and build further on our leadership position in
this market", said Glenn Chamandy, President and CEO of Gildan. "In
addition, the projected economic returns from the acquisition are
highly attractive and are expected to create further value for our
shareholders."
The acquisition is subject to customary closing conditions and
is expected to close by the end of May.
About Gildan
Gildan is a marketer and global low-cost vertically-integrated
manufacturer of quality branded basic apparel. Gildan® is the
leading activewear brand in the screenprint market in the U.S. and
Canada. The brand is continuing to grow in Europe, Mexico and the
Asia-Pacific region. The Company sells T-shirts, sport shirts and
fleece as undecorated blanks, which are subsequently decorated by
screenprinters with designs and logos. The Company is also one of
the world's largest suppliers of athletic, casual and dress socks
sold to a broad spectrum of retailers in the U.S. Gildan markets
its sock products under a diversified portfolio of company-owned
brands, including Gold Toe®, PowerSox®, SilverToe®, Auro®, All
Pro®, GT®, and the Gildan® brand. In addition, the Company supplies
selective national retailer brands. The Company is also the
exclusive U.S. sock licensee for the Under Armour® and New Balance®
brands. In addition to socks, the Company is pursuing a strategy to
grow its sales of branded underwear and activewear products in the
U.S. retail market. With approximately 30,000 employees worldwide,
Gildan owns and operates highly efficient, large-scale,
environmentally and socially responsible manufacturing facilities
in Central America and the Caribbean Basin and has begun the
development of a manufacturing hub in Bangladesh to support its
planned growth in Asia and Europe. More information on the Company
can be found on Gildan's website at www.gildan.com and more
information on its corporate citizenship practices can be found at
www.genuinegildan.com.
Forward-Looking Statements
Certain statements included in this press release constitute
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 and Canadian securities
legislation and regulations, and are subject to important risks,
uncertainties and assumptions. This forward-looking information
includes, amongst others, information with respect to our
objectives and the strategies to achieve these objectives, as well
as information with respect to our beliefs, plans, expectations,
anticipations, estimates and intentions, including, without
limitation, our expectation with regards to earnings per share,
sales revenue, cost reductions and efficiencies, gross margins,
selling, general and administrative expenses, cost synergies from
the integration of the Anvil acquisition and the impact of
non-recurring items. Forward-looking statements generally can be
identified by the use of conditional or forward-looking terminology
such as "may", "will", "expect", "intend", "estimate", "project",
"assume", "anticipate", "plan", "foresee", "believe" or "continue"
or the negatives of these terms or variations of them or similar
terminology. We refer you to the Company's filings with the
Canadian securities regulatory authorities and the U.S. Securities
and Exchange Commission, as well as the "Risks and Uncertainties"
section and the risks described under the "Critical Accounting
Estimates" and "Financial Risk Management" sections in our most
recent Management's Discussion and Analysis for a discussion of the
various factors that may affect the Company's future results.
Material factors and assumptions that were applied in drawing a
conclusion or making a forecast or projection are also set out
throughout this document.
Forward-looking information is inherently uncertain and the
results or events predicted in such forward-looking information may
differ materially from actual results or events. Material factors,
which could cause actual results or events to differ materially
from a conclusion, forecast or projection in such forward-looking
information, include, but are not limited to:
-- our ability to implement our growth strategies and plans, including
achieving market share gains, implementing cost reduction initiatives
and completing and successfully integrating acquisitions;
-- the intensity of competitive activity and our ability to compete
effectively;
-- adverse changes in general economic and financial conditions globally or
in one or more of the markets we serve;
-- our reliance on a small number of significant customers;
-- the fact that our customers do not commit contractually to minimum
quantity purchases;
-- our ability to anticipate changes in consumer preferences and trends;
-- our ability to manage production and inventory levels effectively in
relation to changes in customer demand;
-- fluctuations and volatility in the price of raw materials used to
manufacture our products, such as cotton and polyester fibres;
-- our dependence on key suppliers and our ability to maintain an
uninterrupted supply of raw materials and finished goods;
-- the impact of climate, political, social and economic risks in the
countries in which we operate or from which we source production;
-- disruption to manufacturing and distribution activities due to labour
disruptions, political or social instability, bad weather, natural
disasters, pandemics and other unforeseen adverse events;
-- changes to international trade legislation that the Company is currently
relying on in conducting its manufacturing operations or the application
of safeguards thereunder;
-- factors or circumstances that could increase our effective income tax
rate, including the outcome of any tax audits or changes to applicable
tax laws or treaties;
-- compliance with applicable environmental, tax, trade, employment, health
and safety, and other laws and regulations in the jurisdictions in which
we operate;
-- our significant reliance on computerized information systems for our
business operations;
-- changes in our relationship with our employees or changes to domestic
and foreign employment laws and regulations;
-- negative publicity as a result of violation of local labour laws or
international labour standards, or unethical labour or other business
practices by the Company or one of its third-party contractors;
-- our dependence on key management and our ability to attract and/or
retain key personnel;
-- changes to and failure to comply with consumer product safety laws and
regulations;
-- adverse changes in third party licensing arrangements and licensed
brands;
-- our ability to protect our intellectual property rights;
-- changes in accounting policies and estimates; and
-- exposure to risks arising from financial instruments, including credit
risk, liquidity risk, foreign currency risk and interest rate risk, as
well as risks arising from commodity prices.
These factors may cause the Company's actual performance and
financial results in future periods to differ materially from any
estimates or projections of future performance or results expressed
or implied by such forward-looking statements. Forward-looking
statements do not take into account the effect that transactions or
non-recurring or other special items announced or occurring after
the statements are made, may have on the Company's business. For
example, they do not include the effect of business dispositions,
acquisitions, other business transactions, asset write-downs, asset
impairment losses or other charges announced or occurring after
forward-looking statements are made. The financial impact of such
transactions and non-recurring and other special items can be
complex and necessarily depends on the facts particular to each of
them.
There can be no assurance that the expectations represented by
our forward-looking statements will prove to be correct. The
purpose of the forward-looking statements is to provide the reader
with a description of management's expectations regarding the
Company's future financial performance and may not be appropriate
for other purposes. Furthermore, unless otherwise stated, the
forward-looking statements contained in this press release are made
as of the date of this press release, and we do not undertake any
obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information,
future events or otherwise unless required by applicable
legislation or regulation. The forward-looking statements contained
in this press release are expressly qualified by this cautionary
statement.
Contacts: Investor Relations Sophie Argiriou, Director, Investor
Communications (514) 343-8815sargiriou@gildan.com Media Relations
Genevieve Gosselin, Director, Corporate Communications (514)
343-8814ggosselin@gildan.com www.gildan.com
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