HanesBrands announced Wednesday that it will sell Champion, a more than century-old sportswear brand, to Authentic Brands Group in a deal worth up to $1.5 billion with performance incentives.
Authentic owns brands such as Reebok, Forever 21 and Quiksilver.
The deal is subject to customary closing conditions, which are expected to be completed by the second half of 2024.
Per an official release, HanesBrands has entered into a definitive agreement to sell the intellectual property and certain operating assets of the global Champion business to Authentic Brands Group for a transaction value of $1.2bn, with the potential to reach up to $1.5bn through an additional contingent cash consideration of up to $300 million based on achievement of performance thresholds. The agreement, which has been unanimously approved by the HanesBrands board, is the successful conclusion of the company’s previously announced evaluation of a range of strategic options for the global Champion business.
HanesBrands has made significant progress in recent years to reignite its innerwear business, increase market share, attract younger consumers, and strengthen its operating model. Upon completion of the transaction, the company intends to focus on “the innerwear category and generating above-market growth through continued consumer-centric product innovation and increased investment across its portfolio of leading brands, including Hanes, Bonds, Maidenform, and Bali”.
Bill Simon, chairman of the board, said, “Following a thorough review of options for the global Champion business with the support of our financial and legal advisors, we are pleased to have reached this agreement with Authentic Brands Group that we believe maximizes value for Champion and best positions HanesBrands for long-term success. Importantly, we believe this transaction will enable the Company to accelerate its debt reduction while positioning HanesBrands to deliver consistent growth and cash flow generation through a focused strategy on advancing its leading innerwear brands and optimizing its world-class supply chain.”
