German lingerie group Schiesser AG has cancelled its IPO after being acquired by Israel-based intimate and seamless apparel maker Delta Galil in a deal worth EUR68m (US$90m).

Schiesser, which entered insolvency proceedings in 2009 after being saddled with bad debts of EUR65m (US$85.4m), said the sale will satisfy the claims of creditors up to 100% and enable it to "sustainably exploit its diverse market chances".

"Even though Schiesser certainly would have been a promising share, the current volatile situation at the stock markets had provided fewer benefits for Schiesser's medium-term prospects than the long-term oriented strategic investor Delta Galil," said chairman Dr Volker Grub.

The acquisition will widen Schiesser's international prospects, giving it access to leading international retailers and innovative manufacturing technologies. 

For Delta Galil the move provides a premier underwear brand in Germany and a platform for European growth . The combined businesses have net sales of around US$900m, with branded business accounting for about 47% of sales - up from some 33% at present.

"This is an important transaction that will allow us to make solid progress against many of our strategic goals and will drive further shareholder value," said Delta Galil CEO Isaac Dabah.

"It enables us to grow the branded side of Delta Galil's business by adding the top underwear brand in Germany. Following the acquisition, about 40% of our sales will come from Europe, up from 24% now, and the potential for future growth is exciting."

Dabah added: "Schiesser's brand portfolio and operations are a perfect fit with the business model that we have applied successfully in Israel, and we are excited about extending this model to a much larger European market.

"We see many opportunities to expand Schiesser through product innovation, enhanced distribution and logistics, and development of retail stores and e-commerce activities."

With sales of EUR132m (US$184m) in 2011, Schiesser's business is split into men's (60%), women's (25%) and children's (15%), with products sold under the Schiesser, Schiesser-Uncover, and Schiesser-Revival brands. Retail channels include department stores, specialty stores, and increasingly company-owned retail stores. 

In addition to Germany, key markets for Schiesser brands include Belgium, Netherlands, Switzerland, Austria and Italy, and the company has targeted Russia and Eastern Europe for potential expansion.

Privately-held Schiesser, which is headquartered in Radolfzell, Germany, will operate as a separate wholly owned business unit of Delta Galil under its existing management team. 

"With Delta Galil, we gain a worldwide operating owner, with whom we can enter new foreign markets more consistently and who will further support us in our marketing and distribution strategy," noted Rudolf Bündgen, CEO of Schiesser AG.

"Likewise, Delta Galil has a lot of experience in intimate apparel, activewear and shapewear, as well as socks. Under the Schiesser brand, we can envision additional product categories."