ATLANTA — Gilden Activewear Inc. has agreed to acquire 100 percent of the capital stock of V. I. Prewett & Son, Inc., a Fort Payne, Ala.-based private label supplier of basic family socks to U.S. mass-market retailers, for approximately $125 million with further contingent payments of up to $10 million.
Gildan, which is based in Montreal, Canada, said it would pay cash, which will be financed out of its revolving bank credit facilities. The acquisition, still subject to U.S. regulatory approvals, is expected to close around the end of October.
The two companies said they believe the combination of Gildan and Prewett will enhance the global cost-competitiveness of Prewett’s basic athletic sock programs and result in significant cost reduction synergies.
Also, the companies have jointly developed an integration plan designed to ensure the continuation of Prewett’s capabilities and reputation for strong customer service to mass-market retailers and to further strengthen Gildan’s positioning as a full-product supplier of socks, activewear and underwear for the retail channel.
Prewett currently has annual sales of approximately $190 million. Gildan said the acquisition is expected to be accretive to Gildan’s earnings per share in fiscal 2008 and to increase annual earnings per share by approximately 20 cents after the acquisition integration is complete.