Posted May 11, 2016

 

MONTREAL – Gildan Activewear, Inc. announced that it has signed a definitive agreement to acquire 100 percent of the equity interest of Alstyle Apparel, LLC and its subsidiaries (Alstyle), which constitute the apparel division of Ennis, Inc., for a total cash purchase price of $110 million.

 

The acquisition is subject to regulatory and customary closing conditions and is expected to close before the end of June. 

 

Alstyle manufactures and markets activewear products such as T-shirts and fleece, the majority of which are sold under the Alstyle brand. Alstyle sells its products to screen printers, embellishers and mass-marketers largely in the U.S., as well as in Canada and Mexico. Its manufacturing and distribution operations include a large-scale textile manufacturing facility and cut-and-sew facilities in Mexico, as well as distribution centers located in the United States, Canada and Mexico. 

 

The acquisition of Alstyle immediately expands Gildan’s penetration in printwear markets in the U.S., Canada and Mexico and broadens and complements Gildan’s position in the Western United States, where Alstyle has a strong presence. The acquisition will also allow Gildan to enhance its competitive positioning in the Mexican printwear and retail markets. Further, manufacturing operations in Mexico will allow Gildan to take advantage of preferential trade agreements, which provide duty-free access to markets in South America.

 

Alstyle’s operations will be integrated into Gildan’s Printwear business. The acquisition will allow Gildan to capitalize on significant synergies through the alignment of production operations at Alstyle’s manufacturing facilities in Mexico with Gildan’s standardized manufacturing processes. In addition, through the optimization of capacity, the acquisition provides additional textile manufacturing capabilities to support further sales growth. Gildan also expects to benefit from enhanced purchasing leverage on raw material and other input costs and logistics efficiencies.

 

Alstyle generated sales revenues of $183 million and EBITDA of approximately $19 million for its fiscal year ended February 29. While the acquisition is expected to be slightly accretive to earnings per share in 2016, strong integration synergies are expected to flow through from this transaction in 2017 and 2018. 

 

Source: Gildan