Posted June 26, 2014

 

WINSTON-SALEM, N.C. – HanesBrands, a marketer of everyday basic apparel, announced June 25 that it intends to acquire its former sister company DBApparel of France from Sun Capital Partners, Inc.

 

DBA is a leading marketer of intimate apparel, hosiery and underwear in Europe.

 

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. Together, the two companies would be one of the largest basic innerwear apparel companies in the world and share the worldwide rights to the Playtex, Wonderbra and DIM brands.

 

With the realization of full benefits in three to four years, the acquisition would add, on an annual basis, more than $875 million in net sales, about $125 million in adjusted operating profit excluding actions and about $1.00 in adjusted EPS excluding actions, according to HanesBrands.

 

Hanes’ transaction offer values DBA at $550 million (€400 million) on an enterprise basis.

 

“Purchasing DBApparel would represent another great acquisition for Hanes and a good use of our ample cash flow to generate significant shareholder value,” Hanes Chairman and CEO Richard A. Noll said. “We will be able to reunite two great companies to create significant growth and margin-expansion opportunities. Together, we will be a nearly $6 billion company utilizing our disciplined Innovate-to-Elevate strategy and leveraging our global supply chain.”

 

DBA’s product offerings mirror those of Hanes’ Innerwear segment, and the company is a leader across Western and Central Europe where Hanes does not have a material presence. DBA sells intimate apparel, hosiery and men’s underwear, with nearly half of total company sales coming from intimate apparel.

 

DBA is No.1 in market share for intimate apparel in France and Spain and No. 2 in Italy; No. 1 in men’s underwear in France and Spain; and No. 1 in hosiery in France and Germany.

 

DBA sells innerwear in 16 countries, primarily in Western and Central Europe. About 45 percent of company sales are in France, while the Germany/Austria market accounts for about 15 percent of sales. Italy, Spain and Portugal together account for another 20 percent of sales.

 

DBA’s brands include DIM, Playtex and Wonderbra in multiple countries. DIM accounts for about 50 percent of all sales. National brands include Nür Die hosiery in Germany, Lovable intimate apparel in Italy and Abanderado men’s underwear in Spain.

There are significant opportunities to leverage the increased scale of the combined company and global supply chain, Hanes said. DBA uses a mix of self-owned manufacturing and sourcing from third-party manufacturers.

 

Like Hanes, DBA self-manufactures the significant majority of its hosiery products, with production facilities in France, Germany, Slovakia and Romania. However, DBA outsources the production of about 75 percent of its intimate apparel and underwear, whereas Hanes owns significant intimate apparel and underwear production around the world.

 

“DBA is a great company with an outstanding management team and world-class employees,” said Gerald W. Evans Jr., Hanes’ chief operating officer. “The company is well-run, a market leader and mirrors our Innerwear business. We are looking forward to welcoming the DBA team to Hanes. Together, we have the world’s best innerwear brands, the most knowledgeable employees in the industry, and the size and passion to be the best basic apparel company in the world.”