US children’s apparel specialist Carter’s has agreed to acquire Canadian licensee Bonnie Togs in a deal worth up to US$98m.

The children’s wear retail chain, which has 59 of its own stores plus 22 Carter’s/OshKosh B’gosh outlets, recorded net sales in the year to May 2011 of C$100m (US$103m), up 30%.

Bonnie Togs has been Carter’s principal licensee in Canada since 2007 and the company’s most significant international licensing partner.

The deal, expected to close within 45 days, includes a cash payment upon closing of $62m, with the balance payable upon attainment of certain earnings objectives over a four-year period.

“The acquisition of Bonnie Togs is an important component of our long-term strategy to extend the reach of our Carter’s and OshKosh B’gosh brands to consumers in international markets,” said Michael Casey, Carter’s chairman and CEO.

“We see significant potential for growth in Canada, with an opportunity to operate approximately 160 stores contributing total annual revenues of more than $200m by 2016.”