• Thu. Jul 25th, 2024

HanesBrands is selling its famous sportswear brand Champion to Authentic

HanesBrands, one of the global leaders in iconic apparel brands, announced that it has entered into a definitive agreement to sell the intellectual property and certain operating assets of the company’s global Champion business to Authentic Brands Group (Authentic). The transaction valued at $1.2 billion, with the potential to reach up to $1.5 billion through an additional contingent cash consideration of up to $300 million based on achievement of performance thresholds. The transaction remains subject to customary closing conditions and is expected to be completed in the second half of 2024. Subsequent to the closing, HanesBrands will provide certain transition services for Champion, including operating the business in select regions through a transition period.

HanesBrands net proceeds expectation from the Champion sale transaction is about $900 million

HanesBrands expects net proceeds from the transaction of approximately $900 million, including working capital adjustments and other customary transaction costs and excluding the contingent cash consideration. In line with HanesBrands’ commitment to debt reduction, the company will utilize all net proceeds from the transaction to accelerate its reduction of debt and expects meaningful deleveraging on a net debt-to-adjusted EBITDA basis.

HanesBrands signed an agreement to sell the global Champion business to Authentic Brands Group   Image Source: Champion
HanesBrands signed an agreement to sell the global Champion business to Authentic Brands Group Image Source: Champion

HanesBrands Chairman of the Board Bill Simon said: “Following a thorough review of options for the global Champion business with the support of our financial and legal advisors, we are pleased to have reached this agreement with Authentic Brands Group that we believe maximizes value for Champion and best positions HanesBrands for long-term success. Importantly, we believe this transaction will enable the company to accelerate its debt reduction while positioning HanesBrands to deliver consistent growth and cash flow generation through a focused strategy on advancing its leading innerwear brands and optimizing its world-class supply chain.”

HanesBrands CEO Steve Bratspies stated that the announcement is the culmination of significant effort by their teams to position all of their brands on the optimal path for the future and noted: “Over the past three years, we have taken necessary actions to enhance the company’s operations and financial performance – returning to historical gross margins, reducing our cost structure, lowering our debt levels, and generating consistent cash flow. The successful completion of this transaction further simplifies our business, deleverages our balance sheet and enhances the company’s operations and financial performance. As we begin the next chapter for HanesBrands, we believe we are in an even stronger position to further extend our leadership in innerwear, pursue new cost reduction opportunities as we ensure we have the right operating structure in place, and advance our multi-year flywheel to drive strong shareholder returns.”

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