Li & Fung, the world's biggest textile sourcing group, has added to its US assets with the acquisition of sleepwear specialist American Marketing Enterprises Inc (AME).

The Hong Kong-based company has agreed to acquire all AME's outstanding shares for US$128m, funded from its internal cash reserves.

AME is the US' biggest children's entertainment character licensed private label sleepwear company, with more than 40 licences including Spiderman, High School Musical, Barbie and Dora the Explorer.

"Our US onshore business has grown significantly since its inception a few years ago," said William K Fung, group managing director of Li & Fung.

"We believe this acquisition will establish LF USA, the US subsidiary of Li & Fung, as a leader in the children's sleepwear business."

AME's net sales for the fiscal year ended 31 December 2006 were about US$140m, while pre-tax profits hit US$14.9m.

The deal comes amid a period of aggressive expansion for Li & Fung, which is aiming to record net sales of US$10bn next year.

The company recently acquired UK shoe supplier Peter Black International for GBP48.14m (US$100.6m) and proprietary brand supplier Regatta USA for US$148m.

It has also recently acquired four Liz Claiborne brands - Emma James, Intuitions, JH Collectibles and Tape Measure - through subsidiary Li & Fung USA.