NEW YORK — Maidenform Inc. signed a definitive agreement Wednesday to be acquired by Ares Corporate Opportunities Fund.
The transaction with the private-equity arm of Los Angeles-based Ares Management LLC is expected to close in 60 days.
Officials at Maidenform and its majority shareholder, Oaktree Capital Management LLC, a $29 billion investment advisor firm, would not give a purchase price. However, Maidenform’s president and chief executive officer, Tom Ward, said the 82-year-old matriarch of the bra world generated wholesale revenues “close to $300 million last year and will do in excess of $300 million this year.”
David Kaplan, a partner of the $4.5 billion Ares investment firm, said, “We are impressed with the strong brand equity of the Maidenform, Lilyette and Flexees brands and the significant sales and profit growth potential of the company.”
“We think this is a great opportunity for our company and all of our associates. It adds a tremendous amount of stability to our company,” said Ward, noting that plans include to expand Maidenform’s trademark “I Dreamed…” ads internationally with new products and categories.
Maurice Reznik, president of the Maidenform brand, said, “Now, the uncertainty is out and we want to build the volume of the brands and company, and the equity of the people in the company. This will give Maidenform the support it deserves in branding initiatives.”
In 2003, Maidenform had rekindled its courtship with one of its longtime suitors, VF Corp., with an asking price of $110 million, according to industry observers.
Sources familiar with Maidenform’s previous talks noted that the company’s asking price was too high in the past for such a highly leveraged firm — as much as $180 million in 1997, $150 million in 1999 and $120 million in 2002. In March 1997, VF signed a letter of intent to buy Maidenform, but the deal was aborted for reasons that were never explained.
The ongoing saga of Maidenform’s future has been the object of speculation in the intimate apparel industry since the company emerged from bankruptcy protection in July 1999. The bra specialist, which manufactures, distributes and markets foundations bearing the Lilyette, Flexees and Maidenform brands, has weathered the ups and downs of a sour economy, a weak retail climate, and a slew of mergers and acquisitions in the Nineties that battered the intimates industry.Despite its financial woes, Maidenform’s resiliency as a company and a brand mustered the financial muscle needed to compete with the likes of apparel giants Sara Lee Corp., VF and Kellwood Co. In May 2003, Maidenform completed a three-year secured $60 million revolving line of credit with Congress Financial Corp. Almost immediately exiting Chapter 11 status in 1999, Maidenform was able to secure $60 million asset-based financing from GE Capital.
In a statement, Scott Graves, senior vice president of Oaktree Capital, said his company was “very pleased with Maidenform’s results and the return on our investment.”
The story of Maidenform represents the rise and fall, and rise again, of a brand that many people regarded as a mainstay of the U.S. bra industry. At it’s height in the early Nineties, the company — then headed by third generation owner Elizabeth Coleman — generated estimated annual volume of around $350 million. It was the most powerful, privately held intimates firm in the U.S.
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