A shopper walks past the store of American sportswear brand Champion in Hong Kong.
Budrul Cukrut | Getty Images
Hanesbrands agreed to sell its global Champion business to Authentic Brands Group in a deal valued at $1.2 billion, including contingent cash consideration, the company announced on Wednesday.
According to a Hanesbrands press release, the deal could reach $1.5 billion with up to $300 million in additional cash consideration if performance thresholds are met.
The company expects to receive a net profit of $900 million from the transaction, the statement said. Hanesbrands said the company plans to use the net proceeds to accelerate debt reduction.
Hanesbrands shares rose more than 5% during Wednesday’s trading session.
At the end of the first quarter of 2024, Champion’s trailing-12-month adjusted EBITDA was approximately $75 million.
“We believe this transaction will enable the company to accelerate debt reduction while enabling Hanesbrands to achieve consistent growth and cash flow generation through a focused strategy to advance leading lingerie brands and optimize its world-class supply chain,” Chairman Bill Simon said in a statement. .
The agreement, which Hanesbrands’ board of directors approved unanimously, comes months after the company said it was considering selling Champion.
In November 2023, CNBC reported that Authentic Brands Group and fellow brand management firm WHP Global were interested in purchasing Champion.
Hanesbrands first announced it was considering selling Champion in late September, just over a month after activist firm Barington Capital Group began pressuring Hanesbrands to cut costs and raise cash amid declining sales.