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Fibres/​Yarns

Hanesbrands completes acquisition of DBApparel

The leading apparel company is issuing new full-year 2014 guidance to reflect the added contributions from the DBA acquisition.

5th September 2014

Knitting Industry
 |  Winston-Salem, NC

Knitwear, Knitted Outerwear, Knitted Accessories, Colours/​Trends

The purchase of DBA is Hanes’ second major acquisition in its core innerwear categories in the past year. HanesBrands (HBI) has completed the acquisition of DBApparel, a leading marketer of intimate apparel, hosiery and underwear in Europe, for EUR 400 million.

Hanes will immediately begin cross-company integration planning in order to drive significant value creation and synergy potential by applying Hanes’ Innovate-to-Elevate strategy in Europe and leveraging its global supply chain that primarily relies on self-owned production.

“We are delighted and proud to welcome DBA’s 6,200 employees into the Hanes family, a combination that creates significant growth and margin-expansion opportunities by leveraging strong brands, leading market positions, disciplined innovation, and the best apparel supply chain in the industry,” said Richard A. Noll, Hanes Chairman and Chief Executive Officer. “DBA will immediately contribute to our financial results, and the purchase price of approximately 7½ times EBITDA represents an excellent use of our free cash flow to generate significant shareholder value.”

Guidance for 2014 increased

Hanes has raised its full-year earnings guidance twice previously in 2014 despite the continuation of a generally muted consumer environment.

Most recently, the company raised EPS guidance in conjunction with reporting second-quarter financial results on 23 July 2014, to reflect the margin-enhancing benefits of Hanes’ Innovate-to-Elevate strategy and strong efficiency performance of its self-owned global supply chain. Recent results remain consistent with those expectations, the company reports.

“Our key retailers experienced a slow start to the back-to-school season but have seen continued momentum build through August,” explained Gerald W. Evans Jr., Hanes Chief Operating Officer. “Our Innovate-to-Elevate platforms, particularly X-Temp comfort cooling underwear, T-shirts and socks, are performing very well, creating value for consumers, retailers and shareholders.”

Hanes is issuing new full-year 2014 guidance to reflect the added contributions from the DBA acquisition. Hanes’ new guidance range for net sales is approximately $5.350 billion to $5.375 billion, up from previous guidance of approximately $5.075 billion. The company increased guidance for adjusted operating profit by $25 million to a range of $735 million to $755 million, up from the previous guidance range of $710 million to $730 million.

DBApparel acquisition

The purchase of DBA is Hanes’ second major acquisition in its core innerwear categories in the past year. “Combining DBA’s brands, product development capabilities and talented employees with HanesBrands’ innovation, supply chain and talented employees makes our company a true international powerhouse in innerwear apparel,” Evans said. “The Hanes and DBA management teams are already collaborating on integration planning to unlock value for employees, consumers, retailers and the business.”

There are significant opportunities to leverage innovation and the increased scale of the combined company and its primarily self-owned global supply chain. DBA utilises a mix of self-owned manufacturing and sourcing from third-party manufacturers.

Hanes and DBA were formerly separate sister companies under the ownership of Sara Lee Corporation. In 2006, Sun Capital acquired DBA and Hanes spun off into an independent public company. Now together, Hanes holds the worldwide apparel rights to the Playtex, Wonderbra and DIM brands.

www.hanes.com

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