US: Perry Ellis to buy Rafaella Apparel for $70m
Apparel giant Perry Ellis International Inc is strengthening its position in the women's wear market with the acquisition of women's sportswear maker Rafaella Apparel Group Inc for $70m.
The purchase from private equity firm Cerberus Capital Management also includes warrants to buy 106,564 shares of common stock.
Rafaella designs, sources, markets and distributes a full line of women's better sportswear which is sold across the department store channel. It generated revenues of $122m and adjusted EBITDA of $12.4m in the year to 30 September 2010.
"With the addition of the Rafaella Apparel platform, Perry Ellis will immediately become a more significant player in the women's apparel industry," explains chairman and CEO George Feldenkreis.
The deal also provides cross-selling opportunities across a portfolio of brands that includes Laundry by Shelli Segal and C&C California.
Perry Ellis will finance the transaction through its senior credit facility and cash on hand, and expects the deal to add around $0.40 to its earnings per share for next fiscal year.
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