CANADA: Gildan Activewear to buy hosiery maker Doris for $101m
Doris Inc is the market leader in branded ladies' legwear in Canada
Apparel maker Gildan Activewear is to acquire hosiery, legwear and shapewear manufacturer Doris Inc in a deal worth CDN110m (US$101.4m).
Doris makes branded sheer hosiery, legwear and shapewear products for retailers in Canada and the US, and is the third largest marketer of branded ladies' legwear in North America.
Analyst Stephen MacLeod at BMO Capital Markets describes the move as a "classic" Gildan acquisition, "providing the opportunity for significant value add," including cost synergies in freight and buying power.
"Ultimately, this acquisition furthers Gildan's growth objectives of becoming a full-line supplier of basic family apparel in the retail market," he notes.
Its company-owned brands include Secret sheer pantyhose and shapewear, Silks, and TherapyPlus, which provides therapeutic legwear solutions for medical conditions and everyday activities. Doris also markets its brands including Kushyfoot and TherapyPlus in the US.
Revenues in the US account for close to 30% of the firm's total sales. In addition, it has brand licenses and supplies selective retailer private label programmes.
Revenues for the year ended 31 March 2014 were CDN95m (US$87.6m), and adjusted EBITDA for the same period was CDN14m (US$12.9m). The acquisition is expected to be immediately accretive to Gildan's earnings in fiscal 2015.
The move provides Gildan with its first entry into ladies' intimates and offers a platform for the distribution of its Gildan and Gold Toe brands in Canada.
It also enhances the company's consumer brand portfolio, positions it to increase its penetration in the basic women's apparel markets. Gildan also expects to broaden its retail distribution network in the US due to Doris's strong presence in the food and drug channel.
Headquartered in Montréal, Québec, Doris operates a distribution facility and a sheer hosiery manufacturing plant with knitting, dyeing and packaging capabilities in Montréal. Around half of Doris' production is vertically-integrated.
The company's management team, including the founder's son, president and CEO Jack Hasen, will join Gildan.
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