Knights Apparel sells T-shirts, sweatshirts and other sports apparel with college logos and graphics primarily to mass merchant retailers.

Knights sells apparel representing 400 of the largest US colleges and universities, while Hanes’ Gear for Sports division is already a leading seller of licensed collegiate apparel in university bookstores, the company reports.

Financial details

Hanes is purchasing Knights, which is forecast to have sales of approximately US 180 million for the full-year 2015, from affiliates of Merit Capital Partners.

The transaction will cost Knights approximately US 200 million. The acquisition, which is subject to antitrust review and other customary closing conditions, is expected to close early in the second-quarter 2015.

Assuming an early second-quarter close, the acquisition is expected to add to the company’s previously stated presplit 2015 financial guidance by approximately US 160 million in net sales, and around US 18 million in adjusted operating profit excluding actions.

Stronger growth partner

“This is an exciting acquisition opportunity to leverage our existing Gear for Sports licensed collegiate apparel business, our expertise and size in the mass retail channel, and our low-cost global supply chain,” said Richard A. Noll, Hanesbrands Chairman and Chief Executive Officer. “Combining the two companies is a great way to create value.”

With the addition of Knights, Hanes expects to be an even stronger growth partner for licensed and graphic apparel with more than US 450 million in combined annualized sales.

The combination is expected to create a best-in-class supplier of licensed collegiate apparel that has both low-cost and quick-turn supply capability and is primarily supported by company-owned garment production and graphic embellishment facilities.

Powerful business

Founded in 2001, Knights has approximately 210 employees with primary offices and a distribution centre located in Spartanburg, SC. The company buys all of its apparel from outsourced contractors and sends those garments to outsourced embellishment facilities. The integration of the Knights business into Hanes’ supply chain should yield significant savings and efficiencies.

“Knights Apparel has a tremendous business model and a highly talented team of employees,” said John T. Marsh, HanesBrands Group President, Global Activewear.

“With Knights Apparel added to our existing Gear for Sports collegiate bookstore business, we are building a powerful licensed college apparel business that we can leverage with our substantial capabilities in apparel production, graphic design and graphic printing.”

www.hanes.com