HanesBrands Reunites With French Lingerie Maker DBA

PARIS (The Deal) — Clothes maker HanesBrands (HBI) is poised to add a bit of French flair to its line-up of everyday basics after agreeing to pay an enterprise value 400 million ($546 million) for private equity-backed DBApparel, the maker of some of France’s biggest mass-market underwear brands.

Hanes said Wednesday it had struck a deal with DBApparel owner Sun European Partners LLP that values the target at about 7.5 times Ebitda, a multiple it expects to fall to about 4 times Ebitda counting expected synergies.

The deal, will reunite Hanes, of Winston-Salem, N.C. with its former sister company eight years after they parted ways when Sara Lee Corp. sold DBA to Sun European and spun off Hanes into an independent public company in 2006. It will also represent Hanes’ first expansion into the European underwear market, where it expects to make $875 million of net sales a year within three to four years.

“Purchasing DBApparel would represent another great acquisition for Hanes and a good use of our ample cash flow,” Hanes Chairman and Chief Executive Officer Richard A. Noll said. “We will be able to reunite two great companies to create significant growth and margin-expansion opportunities.”

London-based Sun European bought Sara Lee’s European apparel unit for 100 million euros and agreed to as much as 100 million euros of contingent payments based on the units’ performance. The PE firm had been trying to sell DBA since at least 2012, when it tapped Morgan Stanley to find a buyer. It abandoned that sale last year after offers failed to match the PE group’s own valuation of about 600 million euros.

Despite the false start and the lower valuation, Sun European’s acquisition of DBA has proven “a really successful investment,” said the PE group’s spokeswoman Ellie Fixter. She declined to say how much the investment firm made on the sale.

DBA, which is headquartered in the Parisian suburb of Rueil-Malmaison, makes men and women’s undergarments under the brand names Dim, Playtex and Wonderbra. About 43% of its sales come from France, while Germany and Austria are its second largest market, with a combined 16%.

“Dim is sort of akin to the Hanes of France,” Noll told a conference call to announce the sale. “This isn’t about bringing Hanes to France or Dim to the U.S. It is about driving sales” of DBA’s brands in Europe.”

Hanes will pay for the bulk of the acquisition using about $500 million of debt, including new loans that it plans to finalize by the end of July. “That is slightly less than a full year’s cash flow,” CFO Rick Moss told the conference call. “We don’t expect this to impact our solid DD credit rating.”

The deal for DBA comes just under a year after Hanes acquired Maidenform Brands Inc. for an enterprise value of $575 million. Hanes CEO Noll said Wednesday the company would likely take a pause from dealmaking while it integrated DBA but that further acquisitions remained part of its strategy. “The constraint is always going to be that we are not taking on too much integration risk at any time,” Noll said. “When we feel that is manageable we will look at opportunities.”

Hanes expects the acquisition of DBA to add about 25 cents to its earnings per share over the first year after closing and as much as $1 per share within three to four years. The deal is expected to close as early as the third quarter of 2014.

Hanes took financial advice on the acquisition from JPMorgan Securities LLC. It tapped Cleary Gottlieb Steen Hamilton LLP for legal advice. Sun European’s financial adviser was Morgan Stanley. It took counsel from Kirkland Ellis LLP.

Hanes shares traded on the pre-market at $94.72, up $6.18, or almost 7%, on their Tuesday close of $88.54. The company has a market capitalization of $8.82 billion.

Share and Enjoy

Woman arrested for stealing lingerie

Jamal Williams Reporter

College Station, Texas (KWKT) — A College Station woman was arrested over the weekend for stealing almost 700 dollars worth of merchandise from the Post Oak Mall.

Ann Johnson was caught with almost 500 dollars worth of lingerie from Victoria’s Secret and over 200 dollars worth of clothing from Zumies.

Johnson was asked to leave the store earlier that day after she was caught yelling in Dillard’s claiming the store had stolen her driver’s license.

She returned to Dillard’s an hour later saying it was the only way she could get to her car.

Johnson was then detained and arrested for criminal trespass and two counts of theft of property.
 

Share and Enjoy