The apparel operations of Singapore-based Ocean Sky are set to be acquired by Luen Thai Holdings (LTHL) for US$55m.

The agreement will see LTHL's subsidiary Sunny Force Limited acquire Ocean Sky's wholly owned subsidiary, Ocean Sky Global.

Ocean Sky intends to pay a special dividend of SGD0.016 per ordinary share once the transaction is complete.

A spokeperson for Ocean Sky International also told just-style that Ocean Sky Global will continue all business operations, and that Albert Ang Boon Chong will continue as part of the OSG management team.  

Ocean Sky began restructuring its business in August, and said the deal represents an "excellent opportunity for the group to unlock the value and realise its investment in apparel operations at a satisfactory price."

It says it now plans to expand into other businesses or undertake new investment opportunities that may arise in the future.

"By unlocking the value of our apparel operations business at a good price, we now have the resources to expand and invest in new opportunities, which could potentially generate higher returns to our shareholders on a more sustained basis," said chairman and CEO Edward Ang.

He added: "We see OSG's and LTHL's businesses as synergistic, especially with a complementary product range that can be offered to both existing and new customers of the larger group."

Hong Kong listed Luen Thai Holdings is one of the world's leading apparel manufacturing and supply chain services providers, with operations in the US, Indonesia, Philippines, and China.

The company produces 79m pieces annually for brands and retailers such as Adidas, Coach, Dillard's, Esprit, Fast Retailing, Limited Brands, Polo Ralph Lauren and Targus.

Products include casual wear, ladies' wear, sports and activewear, sweaters, outerwear, children's wear and bags, generating annual revenues of US$957m.

Ocean Sky, meanwhile, has marketing operations in Singapore and Hong Kong, and production units in Cambodia, China and Vietnam. Its customers include Gap Inc, Aeropostale, PVH, VF Corp, Adidas, Reebok, Puma, Columbia Sportswear, Levi Strauss, H&M, Benetton, Marks & Spencer and Calvin Klein.