), has completed the takeover of the underwear apparel chain,
Maidenform Brands Inc., for approximately $583 million. The
buyout is in accordance with Hanesbrands' acquisition
The acquisition was funded with cash and cash equivalents and
short-term borrowings through revolving credit facilities. The
revolving credit facilities are expected to be retired through
Hanesbrands' free cash flow.
Maidenform sells intimate apparel, which forms a core category
of Hanesbrands. The average-figure bra business of Maidenform
targeting younger buyers complements Hanesbrands' full-figure bra
business targeting older women. Moreover, Maidenform's popular
shapewear category fits in very well with Hanesbrands'
established panty business.
The acquisition brings Maidenform's popular brands like
Flexees, Lilyette, Self Expressions and Sweet Nothings and
Hanebrands' market leading brands like Playtex, Bali, Just My
Size, Hanes, Barely There, Wonderbra, Champion and L'eggs under
However, the international operations of the two companies are
limited and overlap only in Canada and Mexico. Both the companies
have small businesses in Europe. Post the takeover, Hanesbrands
plans to expand the Maidenform brands across the untapped Asian
The Maidenform acquisition will augment Hanesbrands' existing
portfolio and allow it to offer tough competition to the likes
L Brands Inc.
) Victoria's Secret, going forward.
The acquisition is expected to be accretive to Hanesbrands'
earnings in the first 12 months. Moreover, it is expected to
generate additional revenues of $500 million, 60 cents in
earnings per share, $80 million of operating profit and $65
million of free cash flow.
We believe that the acquisition synergy and the company's
endeavor to innovate continuously will keep Hanesbrands
competitively ahead of its peers.
Currently, Hanesbrands has a Zacks Rank #3 (Hold). Investors
should consider also stocks such as
G-III Apparel Group Ltd
), all carrying a Zacks Rank #1 (Strong Buy).
G-III APPAREL (GIII): Free Stock Analysis
HANESBRANDS INC (HBI): Free Stock Analysis
MICHAEL KORS (KORS): Free Stock Analysis
L BRANDS INC (LTD): Free Stock Analysis
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