Delta Galil Industries Ltd. (Nasdaq: DELT), the global provider of private label women's intimate apparel, men's underwear, babywear, socks and leisurewear, today announced that it has signed an agreement for the purchase of all of the shares of Inner Secrets, a New Jersey-based manufacturer and marketer of private label bras, and other ladies' intimate apparel.

Inner Secrets' customers include Target, Wal-Mart, K-mart, Victoria's Secret and others. The company outsources to the Far East, especially Hong-Kong, China, Indonesia and Bangladesh. Guyana, Mexico, Haiti and Colombia are outsourcing centres as well. In addition, Inner Secrets owns a factory in the Dominican Republic and a distribution centre in New Jersey. Annual sales of Inner Secrets amounted to $85m in 1999.

Delta's management expects that the transaction, after completion, will be accretive. This purchase is made further to the purchase of Wundies Industries Inc, in the US, which was completed in September 2000, another intimate apparel supplier with significant mass market distribution.

Dov Lautman, chairman of Delta Galil said that the company was pleased with the progress of its acquisition strategy. "Delta will benefit from both companies' presence in the mass market and focus on the intimate and bra categories.

"With these recent acquisitions, Delta will increase its US sales to more than 50 per cent of its total, notably expanding our US presence. Our in-roads into the mass market are growing and we are looking to keep up the momentum."

In consideration for the shares of Inner Secrets, Delta Galil will pay approximately $55m, 85 per cent in cash and 15 per cent in Delta Galil shares. The shares of Inner Secrets are held by its senior management, which will remain with the company for a minimum of three years. In addition, Inner Secrets management will receive a substantial bonus based on the joint performance of Inner Secrets and Wundies.

The company expects the transaction to close at the beginning of January 2001. Completion of the transaction is subject to several conditions including approval of Delta Galil's board, registration of the additional Delta Galil shares on the Tel Aviv Stock Exchange and completion of due diligence.

CoView Capital initiated the transaction and acted as financial advisor to Inner Secrets' selling shareholders.

Delta Galil is a manufacturer of boutique-quality apparel for the mass market sold under brands such as Polo Ralph Lauren, Donna Karan, Calvin Klein, Hugo Boss and Nike and sold worldwide through leading retailers including Marks & Spencer, Victoria's Secret, GAP, Banana Republic and others. For more information, please visit website at http://www.deltagalil.com.