Finance
Hanesbrands will sell the Champion brand to Authentic Brands in a $1.2 billion deal
A shopper walks past the store of American sportswear fashion brand Champion in Hong Kong.
Budrul Chukrut | Getty Images
Hanesbrands agreed to sell its global Champion business to Authentic Brands Group in a transaction valued at $1.2 billion, including a contingent cash consideration, the company has announced on Wednesday.
According to a press release from Hanesbrands, the deal has the potential to reach $1.5 billion via additional cash contingent consideration of up to $300 million if performance thresholds are met.
The company expects to receive net proceeds of $900 million from the deal, the release said. Hanesbrands said the company plans to use the net proceeds to accelerate debt reduction.
Shares of Hanesbrands fell more than 5% during Wednesday’s trading session.
As of the end of the first quarter of 2024, Champion generated approximately $75 million in adjusted EBITDA over the past twelve months.
“We believe this transaction will enable the company to accelerate its deleveraging and position Hanesbrands to generate consistent growth and cash flow through a focused strategy on advancing its leading innerwear brands and optimizing its world-class supply chain.” , said CEO Bill Simon. .
The deal, which Hanesbrands’ board of directors unanimously approved, comes months after the company said it was considering a sale of Champion.
CNBC reported in November 2023 that Authentic Brands Group and fellow brand management company WHP Global were both interested in buying Champion.
Hanesbrands first announced in late September that it was considering firing Champion, just over a month after activist firm Barington Capital Group began pressuring Hanesbrands to cut costs and generate cash amid falling sales.
