As of Thursday, May 5, 2016
Midlothian, Texas–based Ennis Inc. will sell its Alstyle Apparel LLC division to Canadian T-shirt giant Gildan Activewear Inc. for a $110 million all-cash offer subject to a working capital adjustment. The deal is expected to close by the end of June.
Following the close of the deal, Ennis will provide “transition assistance” to Gildan for certain administrative, financial, human resources and information technology functions. Ennis will also sublease from Gildan the Alstyle property in Anaheim, Calif. Under the terms of the deal, Gildan will also pay a $3 million termination fee to an entity called Alstyle Operations LLC. Ennis had struck an earlier deal to sell the Alstyle division to Alstyle Operations LLC for $88 million. Under the terms of the original deal, Ennis retained the right to cancel the agreement if it received another unsolicited purchase offer that was not matched by Alstyle Operations LLC.
“Given the higher purchase price offered by Gildan and the fact that the entire purchase price is payable in cash at the closing of the Gildan transaction, we believe that the sale of the Apparel Division to Gildan represents a superior offer for the company and our stockholders,” said Keith Walters, Ennis president, chief executive officer and chairman of the board, in a company statement.
Alstyle produces activewear such as T-shirts and fleece, which are primarily sold under the Alstyle brand to screenprinters, embellishers and mass-marketers in the U.S., Canada and Mexico. Its manufacturing and distribution operations include a textile manufacturing facility and cut-and-sew factory in Mexico as well as distribution centers in the United States, Canada, and Mexico.
According to Gildan, the acquisition “expands Gildan’s penetration in printwear markets in the U.S., Canada and Mexico” and “complements Gildan’s position in the Western United States, where Alstyle has a strong presence.” Additionally, Alstyle’s Mexican operations will allow Gildan to “take advantage of preferential trade agreements which provide duty-free access to markets in South America.”
As of Feb. 29, the end of its fiscal year, Alstyle’s annual sales were $183 million.
Gildan also produces T-shirts and fleece as well as sport shirts, underwear, socks, hosiery and shapewear under several company-owned brands, including Gildan, Gold Toe, Anvil and Comfort Colors. The company also holds the U.S. sock license for Under Armour as well as licenses for the Mossy Oak and New Balance brands.
With more than 42,000 employees worldwide, Gildan produces its products in its own vertically integrated manufacturing facilities in Central America, the Caribbean Basin and the United States.