Gildan To Acquire Ennis, Inc. Apparel Division Alstyle Apparel, LLC
Supplier Gildan Activewear Inc. (UPIC: GILDA381) has signed a definitive agreement to acquire 100 percent of the equity interest of supplier Alstyle Apparel, LLC (UPIC: alsty754) and its subsidiaries, which constitute the apparel division of supplier Ennis, Inc. (UPIC: Ennis). The acquisition is subject to regulatory and customary closing conditions and is expected to close before the end of June.
The acquisition, which was announced Wednesday in a PPB Newslink breaking news alert, is for a total cash purchase price of $110 million. Alstyle generated sales revenues of $183 million and EBITDA of approximately $19 million for its fiscal year ended February 29, 2016.
Alstyle manufactures and markets activewear products such as t-shirts and fleece, the majority of which are sold under the Alstyle brand to screen printers, embellishers and mass-marketers in the U.S., as well as in Canada and Mexico. The company’s 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 U.S., Canada and Mexico.
The acquisition of Alstyle expands Gildan’s presence in printwear markets in the U.S., Canada and Mexico, and it broadens and complements its position in the Western U.S., where Alstyle has a strong presence. The acquisition also enhances Gildan’s competitive positioning in the Mexican printwear and retail markets. Furthermore, manufacturing operations in Mexico will allow Gildan to take advantage of preferential trade agreements that provide duty-free access to markets in South America.
Alstyle’s operations will be integrated into Gildan’s Printwear business. The acquisition allows 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.