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Hanesbrands to receive $900M in net proceeds for Champion

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Jun 5, 2024
A hoodie by the apparel brand Champion.

Photo: Courtesy of Authentic Brands Group

Hanesbrands struck an agreement to sell Champion to Authentic Brands Group for $900 million in net proceeds.

Why it matters: While the purchase price was advertised as $1.2 billion, a portion of that is a working capital adjustment (cash injection) to keep an asset operating until the deal closes.

What we're hearing: Authentic's final check will be reduced by selling off assets and securing partners for portions of the business, a source says.

  • Authentic declined to comment, while Hanesbrands did not respond to a request for comment.

Catch up quick: Negotiations were expected to drag into late summer, Axios reported late last month.

Between the lines: It's unclear exactly why talks accelerated, but Hanesbrands was under pressure to get a deal signed, amid a volatile M&A market and worse-than-expected Q1 results.

Zoom in: There's still an opportunity for Hanesbrands to add another $300 million to its net proceeds based on "performance thresholds," according to the company's announcement.

  • Hanesbrands says it will use the proceeds to reduce debt.

💭 Our thought bubble: For Authentic, the deal gives it another brand in a growing empire, specifically bolstering its presence in athletic wear — while Hanesbrands is now free to focus on its undergarment business, which includes Maidenform and Bali.

What they're saying: "Authentic plans to leverage its diverse and multifaceted platform of consumer verticals, along with its expertise in brand-building, to convert the Champion business into a licensed model," per Authentic's announcement.

  • "The company is in discussions with several existing and potential operators in key regions to manage the manufacturing, physical retail, e-commerce and wholesale operations of the business and maintain the brand's global footprint," the company said.

What we're watching: The deal is expected to close in the second half of this year, but it must first get past antitrust regulators, who are currently attempting to block the merger of Tapestry and Capri.

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