US: Unifi to buy Dillon Yarn for $65m
Yarn maker Unifi has signed an agreement to acquire the assets, including inventory, of Dillon Yarn Corporation's Dillon Yarn Division, a textured yarn business.
Unifi will buy Dillon Yarn for about US$65m consisting of about $44.5m in cash and the issuance of about 8.3m shares of common stock.
Dillon Yarn Corporation is a privately-held company that operates a facility in Dillon, South Carolina and textured about 90m pounds of polyester and nylon combined for the 12 months ended December 2005. Annual sales of the assets being acquired were about $130m.
Unifi currently supplies about $40m of raw material to Dillon that will be treated as inter-company sales after closing. Synergies generated from the transaction in fiscal year 2008 are expected to be in the range of between $6-8mn. The company expects this transaction to be accretive to earnings by about $.09 cents per share in its fiscal year ended June.
As a result of this transaction, Unifi expects to be able to lower the overall cost of production through operational synergies, which will enable it to better compete both with regional and global competition that has made significant inroads into the US market over the past several years.
The company expects to continue to operate the facility in South Carolina and streamline the product mix with its existing production facilities.
Subject to governmental approval and other customary conditions, the purchase is expected to be completed in early January 2007.
Unifi is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials.
The company reported net losses for its final quarter of and full-year 2006 but said it was pleased with improvements made.
Help test our new apparel sourcing tool.
- $1.7bn package to boost Pakistan clothing exports
- Outlook 2017 – What next for apparel sourcing?
- Mexico riots hit apparel retailers and shipments
- Is China about to burst its apparel trade bubble?
- Trump and the apparel industry – Infographic
- MAS Holdings planning second industrial park
- Cambodia clothing exports at risk from Brexit
- Aéropostale to reopen 500 stores across the US
- JC Penney latest retailer to shutter stores?
- Apparel brands urge Bangladesh PM to address wages
- Global apparel markets: product developments and innovations, October 2016
- Anti-odour clothing: fresh fashion for an active lifestyle
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Global market review of lingerie – forecasts to 2022
- Outdoor performance apparel 2016: A broader perspective