American clothier Hanesbrands to buy Maidenform Brands for $547 mn

Hanesbrands Inc (Hanes), an American clothing company whose brands are found in eight out of 10 US households, today said that it would acquire lingerie company Maidenform Brands Inc, for $547 million in order to expand its intimate apparel portfolio.

Winston-Salem-based Hanes will pay $23.50 per share in cash, a 30-per cent premium to Maidenform's average closing price over the past 30 days.

The transaction, valued at around $575 million on an enterprise-value basis, has been approved by the boards of directors of both companies, but the closing, expected in the fourth quarter of 2013, is subject to Maidenform shareholder and other regulatory approvals.

Hanes plans to fund the acquisition with cash on hand and short-term borrowings on its revolving credit facility, which will be retired through free cash flow.

''We look forward to adding Maidenform's exciting brands and deep product expertise,'' said, Richard Noll, Hanes chairman and CEO.

''This business is a natural fit into our core business and meets all of our acquisition criteria. We continue to use our free cash flow to create shareholder value, including paying quarterly cash dividends, reducing debt, and making smart, accretive acquisitions,'' he added.

Hanes said that Maidenform has a great average-figure bra business that complements its own full-figure bra business. Maidenform is also recognised for its shapewear, while Hanes has an established panty business.

The combination presents long-term growth opportunities by combining the respective strengths and capabilities of the portfolios and cross-introducing new products.

New Jersey-based Maidenform sells intimate apparel bras, shapewear and panties under such brands as Maidenform, Flexees, Lilyette, Self Expressions and Sweet Nothings, as well as Donna Karan and DKNY under license.

In 2012, 57 per cent of its revenue was generated by bra sales and 35 per cent by shapewear sales. Approximately 90 per cent of sales were in the US.

Hanes' intimate apparel brands include Playtex, Bali and Just My Size, which are market leaders in the full-figure bra category, as well as Hanes, Barely There, Wonderbra, Champion and L'eggs, and Donna Karan and DKNY under license.

Maidenform sources all of its products from third-party manufacturers, while Hanes has company-owned global manufacturing supplemented by third-party manufacturing.

Hanes expects to leverage its low-cost supply chain to maximize the value of Maidenform to retailers and consumers.