Gildan Activewear To Buy HanesBrands In $4.4B Deal

Gildan Activewear Inc. (GIL) is set to acquire HanesBrands Inc. (HBI) in a transaction valued at about $4.4 billion in enterprise value, the companies announced on Wednesday.

“The combination with HanesBrands strengthens our positioning with an opportunity to expand the heritage 'Hanes' brand presence in activewear across channels, while enhancing Gildan’s retail reach for its portfolio of brands,” said Gildan CEO Glenn J. Chamandy.

Retail sentiment on Gildan remained unchanged in the ‘bullish’ territory, with chatter at ‘high’ levels, according to data from Stocktwits. U.S.-listed shares of Gildan were down 1% before the bell.

The firms noted that HanesBrands shareholders will receive 0.102 common shares of Gildan and $0.80 in cash for each share of HanesBrands common stock.

They added that the offer implies a value of $6.00 per HanesBrands share, representing a premium of about 24% to HanesBrands' closing price on August 11. HanesBrands shareholders will own about 19.9% of Gildan shares on a non-diluted basis when the deal closes, providing the company’s shareholders the ability to participate in the combined entity’s expected growth opportunities and synergies.

Retail sentiment on HanesBrands dipped to ‘bullish’ from ‘extremely bullish’ a day ago, with chatter at ‘extremely high’ levels, according to Stocktwits data.

The companies expect to realize at least $200 million in annual run-rate cost synergies within three years of closing, and it is estimated to be immediately accretive to Gildan’s adjusted earnings per share (EPS). Adjusted EPS compound annual growth rate over the next three years is expected to be in the low 20% range, the companies said.

Morgan Stanley & Co. LLC and CIBC Capital Markets acted as financial advisors to Gildan, while Goldman Sachs & Co. LLC acted as lead financial advisor to Hanesbrands.

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