MONTREAL — February 4, 2015 — Gildan Activewear Inc. today announced that it has signed a definitive agreement to acquire substantially all of the assets of Comfort Colors, the leading supplier of garment-dyed undecorated basic T-shirts and sweatshirts for the North American printwear market, for a total purchase price of approximately U.S. $100 million. The purchase consideration will be paid in cash and will be financed out of Gildan’s bank credit facility. The acquisition is subject to customary closing conditions and is expected to close by the end of the current calendar quarter.
Comfort Colors markets its products under the Comfort Colors® brand, which is one of the most recognized brands among consumers purchasing from college bookstores, specialty retail stores, destination and resort shops. Comfort Colors purchases prepared-for-dye garments from third-party vendors, including Gildan. The garments are subsequently treated through a customized in-house dyeing process, giving the shirts a trendy distressed or worn look and a soft and a comfortable feel.
The acquisition of Comfort Colors reinforces Gildan’s strategy to increase its penetration of the growing fashion basics segment of the North American printwear market. Comfort Colors has generated strong annual sales growth over the last four years reflecting the brand’s fast growing consumer appeal. During the twelve-month period ended December 31, 2014, Comfort Colors generated net sales of approximately U.S. $95 million, or U.S. $55 million after eliminating Gildan sales of undecorated shirts to Comfort Colors. EPS accretion in the balance of calendar 2015 from the acquisition is projected to be approximately U.S. $0.05 after reflecting the amortization of intangible assets and a non-recurring acquisition-related inventory charge. The Company projects EPS accretion in excess of U.S. $0.20 once the integration of the acquisition is complete, including projected revenue and cost synergies and continued organic growth.
Comfort Colors is headquartered in Northfield, Vermont and has dyeing, packaging and distribution operations in facilities in Northfield, Vermont and New Bedford, Massachusetts.
Posted February 10, 2015