Gildan Activewear – GIL – To acquire 100% of the common shares of Anvil Holdings

Gildan Activewear Inc. (NYSE: GIL) announced that it has signed a definitive agreement to acquire 100% of the common shares of Anvil Holdings, Inc. (Anvil) for a total purchase price of approximately U.S. $88 million. The acquisition will be financed by utilization of Gildan’s bank credit facility.

GIL will not assume any of Anvil’s currently outstanding indebtedness.  Anvil is a supplier of high-quality basic T-shirts and sport shirts for the printwear market. It has positioned itself as a supplier of high-value branded niche products within the U.S. distributor channel, including products such as Anvil Organic®, Anvil Recycled® and Anvil Sustainable®.

It has also increasingly established itself as a strategic supplier of basic apparel products which meet rigorous quality and social compliance criteria for major non-retailer brands. For its fiscal year ended January 28, 2012, Anvil generated EBITDA of approximately U.S. $17 million on sales revenues in excess of U.S. $200 million.

GIL expects to generate significant acquisition synergies as a result of integrating Anvil’s production for the printwear market into Gildan’s low-cost vertical manufacturing, the integration of Anvil’s U.S. and international distributor sales into Gildan’s Printwear business, consolidation of purchasing of raw materials and other purchased cost inputs, the elimination of certain duplicate administrative functions, and savings in ongoing working capital requirements.

Anthony Corsano, President and CEO of Anvil, will continue his career with Gildan as a member of Gildan’s senior management team. Mr. Corsano will join Gildan’s Branded Apparel division and focus on the continuing development of Anvil’s strategy to grow its business of providing high-volume quality products for non-retailer brands.  “We believe that the acquisition of Anvil and the combination of the compatible cultures and strengths of our two companies will position GIL to further enhance our product offering for our printwear customers and build further on our leadership position in this market”, said Glenn Chamandy, President and CEO of Gildan. “In addition, the projected economic returns from the acquisition are highly attractive and are expected to create further value for our shareholders.” The acquisition is subject to customary closing conditions and is expected to close by the end of May.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.