Leading apparel retailer,
) has announced the takeover of the underwear apparel chain,
Maidenform Brands Inc.
), for approximately $575 million.
The buyout is in accordance with HBI's acquisition strategy.
Maidenform sells intimate apparel, which forms a core category of
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
The acquisition will bring 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 deal, expected to close in the fourth quarter of 2013, will
be funded by cash in hand and short-term borrowings on
Hanesbrands' revolving credit facility. However, the deal is
subject to approval from Maidenform's shareholders and regulatory
authorities as well as completion of other formalities.
The Maidenform acquisition will enrich Hanesbrands' existing
portfolio and will allow it to offer tough competition to the
L Brands Inc.'s
) 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 revenue 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.
COLUMBIA SPORTS (COLM): Free Stock Analysis
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HANESBRANDS INC (HBI): Free Stock Analysis
L BRANDS INC (LTD): Free Stock Analysis
MAIDENFORM BRND (MFB): Free Stock Analysis
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Currently, Hanesbrands has a Zacks Rank #1 (Strong Buy).
Investors should consider also stocks such as
), all carrying a Zacks Rank #1 (Strong Buy).