Transaction value is $1.2 billion with potential to reach $1.5 billion based on contingent cash consideration of up to $300 million
Strengthening focus on global innerwear business and accelerating debt repayment to further enhance value delivery to shareholders
Winston-Salem, North Carolina, June 5, 2024–(BUSINESS WIRE)–Hanesbrands (NYSE: HBI), a global leader in iconic apparel brands, today announced that it has entered into a definitive agreement to sell the intellectual property and certain operating assets of its global brands. champion Hanesbrands is divesting the business to Authentic Brands Group (“Authentic”) for a transaction value of $1.2 billion, with an additional contingent cash consideration of up to $300 million contingent on the achievement of performance milestones, which could bring the total value to up to $1.5 billion. The agreement, which was unanimously approved by the Hanesbrands Board of Directors, marks the successful conclusion of the Company's previously announced evaluation of global strategic business options. champion work.
Hanesbrands has made significant progress in recent years to revitalize its innerwear business, grow market share, engage younger consumers and strengthen its operating model. Following the closing of the transaction, the company plans to expand its leadership position in the innerwear category and focus on generating above-market growth through continued consumer-centric product innovation and increased investment in its leading brand portfolio, including: Haynes, Bonds, Maidenform, and Bali.
“After a thorough review of our global options, we have decided to champion Working with the support of our financial and legal advisors, we are pleased to have reached this agreement with Authentic Brands Group and believe it maximizes value for our company. champion “This transaction will best position Hanesbrands for long-term success. Importantly, we believe this transaction will enable Hanesbrands to accelerate its deleveraging, while delivering consistent growth and cash flow generation through a strategy focused on developing its leading innerwear brands and optimizing its world-class supply chain.”
“Today's announcement marks the culmination of significant team work to put all of our brands on the optimal trajectory for the future,” said CEO Steve Bratspies. “Over the past three years, we have taken the necessary steps to strengthen our business and financial performance, including returning to historical gross margins, reducing our cost structure, lowering our debt levels and generating stable cash flows. The successful completion of this transaction will further simplify our operations, reduce the leverage on our balance sheet and enhance our operations and financial performance. As we begin this new chapter for Hanesbrands, we believe we are in an even stronger position to further extend our leadership in innerwear, pursue new cost savings opportunities while establishing the right business structure and advance our multi-year flywheel to drive strong returns for shareholders.”
Transaction details and use of proceeds
The transaction is subject to customary closing conditions and is expected to close in the second half of 2024. Upon closing, Hanesbrands will: championThis includes operating in certain regions during a transition period.
Hanesbrands expects net proceeds from the transaction to be approximately $900 million, including working capital adjustments and other customary transaction costs, but excluding the contingent cash consideration. Consistent with Hanesbrands' debt reduction efforts, the company will use all of the net proceeds from the transaction to accelerate debt reduction and expects to achieve significant debt reduction in terms of net debt-to-adjusted EBITDA ratio.
On a trailing 12-month basis as of the end of the first quarter of 2024, champion The business generated adjusted EBITDA of approximately $75 million, net of remaining costs of approximately $60 million. The Company has specific plans to complete the transition of the business and eliminate all remaining costs within one year of closing.
Our company, champion The company plans to discontinue operations in the second quarter of 2024 and, as a result, will update its full year 2024 guidance in conjunction with the release of its second quarter financial results.
Advisor
Goldman Sachs & Co. LLC and Evercore are acting as financial advisors to HanesBrands, and Kirkland & Ellis LLP and Jones Day are serving as legal advisors.
Caution Regarding Forward-Looking Statements
This news release contains certain information that may constitute forward-looking statements within the meaning of U.S. federal securities laws. Forward-looking statements include all statements that do not relate solely to historical or current facts and generally can be identified by the use of words such as “may,” “believe,” “potential,” “will,” “expect,” “outlook,” “potential,” “plans,” “estimates,” “future,” “intend,” “anticipate,” “plans,” “continue” or similar words, including statements regarding the expected benefits, financial impact and timing of global sales. champion Forward-looking statements about our business are statements about future expectations of our business, including the use of proceeds to reduce debt. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding our intentions, beliefs and current expectations regarding our strategic direction, prospects and future results are forward-looking statements and are subject to risks and uncertainties that may cause actual results to differ materially from those implied or expressed by such statements. These risks and uncertainties include, but are not limited to, the timing of when necessary regulatory approvals for the proposed sale of our global businesses will be obtained. champion whether any businesses will be acquired, whether the closing conditions will be satisfied and when the global sale proposal will be made; champion whether or not the business will be closed, the ability to successfully consummate and realize proceeds from the proposed sale of the global business, or the ability to realize proceeds; champion the business, trends relating to our business, our ability to successfully implement our transformation plan to its full potential and global economic and other risks if the divestiture is not completed; champion performance projections, the rapidly changing retail environment and levels of consumer demand, the effects of geopolitical conflicts (including the ongoing Russia-Ukraine and Middle East conflicts) or a public health emergency or severe global health crisis, including the impacts on consumer spending, global supply chains, critical supply routes and financial markets, our ability to reduce or deleverage within the expected timeframes (which could adversely affect our ability to satisfy financial covenants in our credit agreements or other contractual arrangements), information technology deficiencies, disruptions, integration failures or security failures, future impairments of intangible assets or goodwill due to changes in business, market conditions or other factors (including divestitures of assets). champion These risks and uncertainties include, but are not limited to, risks in our business, significant fluctuations in foreign currency exchange rates, legal, regulatory, political and economic risks associated with international operations, our ability to effectively manage complex international tax structures, future financial performance and other risks identified from time to time in our most recent reports to the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Because it is impossible to predict or identify all risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Forward-looking statements speak only as of the date on which they are made, and HanesBrands undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
About Hanesbrands
Hanesbrands (NYSE: HBI) creates everyday clothing that consumers around the world know and love for comfort, quality and value. The company's iconic brands include: Haynesa basic apparel brand representing the United States. championAn innovator at the intersection of lifestyle and sports apparel. BondsSetting new standards in design and sustainability. Maiden FormAmerica's #1 Shapewear Brand. Baliis the number one bra brand in America. HBI employs 48,000 people in approximately 30 countries and has earned a reputation for the quality of its work environment and ethical business practices. A long-time leader in sustainability, the company has set aggressive 2030 goals to improve people's lives, protect the planet, and produce sustainable products. Building on its unmatched strengths, HBI is positioning itself to realize its full potential and deliver long-term growth that benefits all stakeholders.
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contact address
News media contact: Nicole Ducoue, (336) 986-7090
Analyst and Investor Contact: TC Robillard, (336) 519-2115
