Hanesbrands Inc. is completing its family of champions as it acquires Champion Europe.
Hanesbrands already owned Champion in the Americas, Asia and Australia. The deal is an all-cash transaction and will be 10 times calendar 2016 earnings, for a total of 200 million euros, or $227 million at current exchange rates.
Italy-based Champion Europe expects 2016 net sales of 190 million euros, or $215 million, and operating profits of 15 million euros, or $17 million. The company’s largest wholesale markets are Italy, Greece, Spain and Scandinavia. It also operates 130 retail stores in Italy and Greece.
Champion Europe will be run as a division of the company’s global Champion organization. Sauro Mambrini will be the chief executive officer and president of Champion Europe.
“This acquisition coupled with the recent purchase of the Champion business from our licensee in Japan will unite the Champion brand globally and will give us a powerful platform for growth on every continent,” said Hanesbrands chief operating officer Gerald W. Evans Jr. “Sauro Mambrini and the highly capable management team of Champion Europe will be a great addition to our organization.”
Evans said on a conference call that the acquisition will lead to roughly $1.2 billion in worldwide sales for Champion. He also believes that sales could approach $2 billion within five to six years.
“Champion is a great brand that resonates with consumers worldwide,” Mambrini said. “In Europe, we have built a business that reflects the Champion heritage from the United States and then optimizes a natural affinity for Italian apparel design. Our team is eager to join the global Champion team, which will benefit the business in every market served and increase the potential for expansion into new markets.”
Champion Europe is predominantly a southern European business and the goal is to push the business into Northern and Eastern Europe. The acquisition is expected to close midyear 2016 and Hanesbrands said it will update its financial guidance to include the acquisition.
“This is a great time to do an acquisition,” Hanesbrands chief executive officer Richard A. Noll said. “Our overall business is trending as expected; our recent acquisitions are performing well; we have a vision for Champion as a global brand, and we feel good about delivering double-digit earnings growth in 2016 and for many years to come.”