Gildan provides details on American Apparel bid
Gildan Activewear Inc announced on Monday that it has entered into an asset purchase agreement (APA) to buy the intellectual property rights of the American Apparel brand and certain assets from American Apparel, for approximately $66 million in cash. The company will also separately purchase a limited supply of inventory from American Apparel, but will not be buying any of American Apparel's retail stores as part of the transaction.
The Canadian apparel manufacturer says that the American Apparel brand would represent a strong complementary addition to the Company's current brand portfolio. The acquisition is equally expected to create revenue growth opportunities by leveraging Gildan's extensive distribution network in North American and international printwear markets, allowing the brand to further penetrate the faster growing fashion basics segments of the market. What’s more, the company has also announced interest in potential wholesale opportunities for within its Branded Apparel business.
American Apparel voluntarily filed for Chapter 11 bankruptcy protection on November 14, 2016.
Gildan says it expects to complete the purchase in the first quarter of 2017, but the Bankruptcy Court may require American Apparel to hold an auction for its assets and business under which this proposed acquisition would constitute the initial bid.
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