WWD.com/beauty-industry-news/financial/fashion-apparel-sees-m-a-activity-surge-in-the-first-half-of-8217-04-705139/
government-trade
government-trade

Fashion Apparel Sees M&A Activity Surge In the First Half of ’04

NEW YORK — So far, 2004 is turning out to be a blockbuster year for apparel mergers and acquisitions.<BR><BR>According to data compiled by Factset Mergerstat, the 108 deals in the first half of 2004 had a total disclosed value of $5.83 billion, a...

NEW YORK — So far, 2004 is turning out to be a blockbuster year for apparel mergers and acquisitions.

According to data compiled by Factset Mergerstat, the 108 deals in the first half of 2004 had a total disclosed value of $5.83 billion, a 110.4 percent gain over the 100 deals valued at $2.77 billion in the same period last year.

In 2003, the 182 disclosed deals, both here and abroad, reached $4.54 billion, according to revised data from Factset, which is a leading provider of U.S. and international M&A information to the investment banking and corporate markets.

The latest data also show 2004’s first half outpacing 2001’s full-year transactional total of $5.77 billion on 158 deals. The dollar amount for the first six months of 2004 for announced deals is also more than half of the total value of deals — $8.57 billion on 152 marriages — in 1999, a stellar year for mergers and acquisitions.

Of course, the number of deals in the first half of 2004 include Pinault Printemps Redoute’s $3.5 billion swallow of Gucci Group in March, which will likely remain the deal of the year as far as dollar volume. Following Gucci, the second-highest transaction was VF Corp.’s $396 million acquisition of Vans Inc. Jones Apparel Group took third place with its $345.52 million buy of Maxwell Shoe Co. Inc. Polo Ralph Lauren followed with its acquisition of RL Childrenswear Co. for $250 million in a deal announced in May.

Of the 108 deals so far this year, U.S.-based firms led way, with 34 on the buy side. Following the U.S. lead for buyers, Hong Kong-based firms led the way among Asian firms at 12. Malaysia and Japan were next, with each country having 8 firms involved in purchase agreements. Among the European countries, Italy was first at 7 transactions, followed by France with 5 deals.

U.S.-based firms also led the way among sellers, with 31 companies looking for marriage partners. Japanese firms came in second, with 10 companies seeking a merger. Hong Kong was third, with 6 firms, and Chinese and Malaysian firms tied at five companies from each country. Among the European firms, Italy again beat out France, at nine and six, respectively.

Of the 108 transactions, 55 included publicly disclosed sums. At least two of the deals involved investment firms. London-based Artemis Fund Managers in January said it was buying Bath, U.K.-based Mulberry Group for $1.92 million. Los Angeles-based Ares Management in March said it was acquiring Maidenform Inc. in a private transaction. The deal, which closed in May, is estimated to be in the $215-million range.

Of the mergers listed, VF Corp. was the most active among U.S. firms. The Greensboro, N.C.-based company announced three deals in which it was the purchaser and one as the seller. VF’s biggest deal so far was its announced $396 million purchase of Vans Inc. The apparel giant also bought Edegem, Brussels-based Kipling Belgium in June and Milan-based Green Sport Monte Bianco in April, both for undisclosed sums. Its long-awaited divorce from VF Playwear Inc./Healthtex, its children’s wear division, came through in May when VF agreed to sell the unit for an undisclosed sum to fellow U.S.-based firm Lollytogs Ltd.

Jones Apparel Group, which placed third on the overall list because of its $345.5 million purchase of Maxwell, also found a new home for Tomwell Ltd., which it sold to Hong Kong-based Luen Thai Overseas Ltd. for an undisclosed sum.

Rounding out the sellers was the January sale of Cynthia Steffe by Three Cities investment firm to Bernard Chaus Inc. for an undisclosed sum.

And while it was the big-name players that made the news — Oxford Industries Inc.’s $147 million purchase of London-based Ben Sherman Manufacturing Ltd.; Quiksilver Inc.’s $144.23 million buy of DC Shoes Inc. in March, and Kellwood Co.’s $140 million acquisition of Phat Fashions in January — a good portion of the marriages were made between firms in the apparel industry with firms in more specialized niches. One example is the announcement in June that Westport, Conn.-based Windsong Allegiance Group, which owns the Joe Boxer label sold at Kmart, in June acquired for an undisclosed sum Palm Springs, Calif.-based Como Sport, a luxury sportswear firm with roots in the golf industry.

Top 25 Disclosed M&A Deals
(First Half, 2004)
Deal Size (in millions)
Date Announced
SellerBuyer
$3,495.80
22-Mar-04
Gucci Group NVPinault Printemps Redoute SA
$396.00
27-Apr-04
Vans Inc.VF Corp.
$345.50
25-Feb-04
Maxwell Shoe Co. Inc.Jones Apparel Group Inc.
$250.00
26-May-04
RL Childrenswear Co. LLCPolo Ralph Lauren Corp.
$196.20
8-Apr-04
Hockey Company Holdings Inc.Reebok International Ltd.
$165.00
6-Feb-04
Hat World Corp.Genesco Inc.
$147.00
21-Jun-04
Ben Sherman Manufacturing Ltd.Oxford Industries Inc.
$144.20
8-Mar-04
DC Shoes Inc.Quiksilver Inc.
$140.00
8-Jan-04
Phat Fashions LLCKellwood Co.
$93.10
30-Jan-04
Raika Co Ltd.Itochu Corp.
$73.00
11-Feb-04
RCS Mediagroup SpA (Joseph Abboud)Childs Jw Associates LP
$46.90
5-Feb-04
Jack Corp.Tokyo Style Co. Ltd.
$41.00
15-Jun-04
Altama Delta Corp.Phoenix Footwear Group Inc.
$35.50
31-Mar-04
Salomon & Taylor Made Ltd.Adidas Salomon AG
$30.00
28-Jun-04
Exclusively Misook Inc.Hartmarx Corp.
$23.70
31-Mar-04
Jobman Holding AB (Jobman Workwear Ltd./Jobman Workwear AB)New Wave Group AB
$21.80
16-Mar-04
American Trouser Inc.Block Corp.
$20.00
24-May-04
Prosperous Industrial (Holdings) Ltd.Yue Yuen Industrial Holdings Ltd.
$17.00
30-Jun-04
Leman Capital (Guy Laroche)YGM Trading Ltd.
$14.30
4-Mar-04
Eagle Nice International Holdings Ltd.Yue Yuen Industrial Holdings Ltd.
$13.00
15-Jun-04
American Athletic Inc.Russell Corp.
$12.60
23-Mar-04
Zhongke Nanotech Engineering Center Co. Ltd.Good Fellow Group Ltd.
$12.50
3-Mar-04
Ced Italia SpASamar SpA
$10.00
3-Jun-04
Superior Merchandise Co. Inc.Tandy Brands Accessories Inc.
$9.50
15-Apr-04
Miroza Leather M Sdn BhdMESB Bhd
Source: Factset Mergerstat