US: Tarrant to buy Buffalo Group for up to $120m
Clothing maker Tarrant Apparel is to buy certain assets and entities of the Buffalo Group, a lifestyle brands company.
The purchase price will be up to US$120m and consists of about $40m in cash, $15m in promissory notes, shares exchangeable into a total of 13m shares of Tarrant's common stock, earn-out payments of up to $12m based upon the Buffalo Group achieving certain earnings targets over the next four years, a contingent payment if Tarrant's stock does not reach a minimum price over the next five years, and the assumption of debt.
Tarrant expects to close the acquisition during the first quarter of 2007, and expects it to be accretive to 2007 earnings.
The completion of the acquisition is subject to a number of conditions.
1985-founded Buffalo had revenue for the first nine months of fiscal 2006 of $75m and for fiscal 2005 of $104m.
The company's product line includes women's wear and men's wear, along with goods such as belts, shoes, lingerie and sleepwear, kids wear, watches and home décor operated under licensing agreements.
Buffalo has 45 retail locations in Canada under the Buffalo by David Bitton name. It also distributes its clothing through upscale retailers such as Bloomingdale's, Nordstrom's, Fred Segal's and Macy's East and West. It currently has about 200 stores within stores.
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