Gildan Activewear announced today that it has signed a definitive agreement to acquire 100% of the common shares of Anvil Holdings, Inc. (Anvil) for a total purchase price of approximately U.S. $88 million. The acquisition will be financed through Gildan's bank credit facility and the company will not assume any of Anvil's outstanding debts.

Anvil is a supplier of high-quality basic T-shirts and sport shirts for the print wear market. It has positioned itself as a supplier of high-value branded niche products within the U.S. distributor channel, including products such as Anvil Organic, Anvil Recycled and Anvil Sustainable. It has also increasingly established itself as a strategic supplier of basic apparel products which meet rigorous quality and social compliance criteria for major non-retailer brands.

For its fiscal year ended January 28, 2012, Anvil generated earnings of approximately U.S. $17 million on sales revenues in excess of U.S. $200 million.

Gildan expects to generate significant acquisition synergies as a result of integrating Anvil's production for the print wear market into Gildan's low-cost vertical manufacturing, the integration of Anvil's U.S. and international distributor sales into Gildan's Printwear business, consolidation of purchasing of raw materials and other purchased cost inputs, the elimination of certain duplicate administrative functions, and savings in ongoing working capital requirements.

The acquisition is said to immediately provide Gildan with higher market share in the U.S. distributor channel, for the same investment that would be required to support the incremental sales revenues from the acquisition if they were generated through organic growth. Subsequent to the acquisition, Gildan intends to continue to pursue further sales growth in the print wear market, through leveraging the combined strengths of the two companies.

Anthony Corsano, President and CEO of Anvil, will continue his career with Gildan as a member of Gildan's senior management team. Mr. Corsano will join Gildan's Branded Apparel division and focus on the continuing development of Anvil's strategy to grow its business of providing high-volume quality products for non-retailer brands.  

"We believe that the acquisition of Anvil and the combination of the compatible cultures and strengths of our two companies will position Gildan to further enhance our product offering for our printwear customers and build further on our leadership position in this market", said Glenn Chamandy, President and CEO of Gildan.

"In addition, the projected economic returns from the acquisition are highly attractive and are expected to create further value for our shareholders."

The acquisition is subject to customary closing conditions and is expected to close by the end of May.