Gildan Activewear Inc. has reported lower profit in its second quarter results announced this week and announced it is buying t-shirt and sports shirt supplier Anvil Holdings Inc. The Canadian sportswear company cited sharply higher cotton costs for the 56 percent earnings decline.
The Montréal based company also announced that it has acquired Anvil Holdings, Inc., which trades in the promotional merchandise as Anvil Knitwear.
In the transaction, Gildan acquired 100 percent of Anvil for a purchase price of approximately $88 million. In the year ending January 28, 2012, Anvil generated earnings of $17 million on sales revenues of $200 million. Gildan expects significant synergies in integrating Anvil’s products and distribution channels, in the consolidation of raw material purchasing, the elimination of duplicate functions and other areas.
Anvil President and CEO Anthony Corsano will join the senior management team within Gildan’s Branded Apparel division, where he will continue Anvil’s strategy of growing its business of providing 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,” says 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.”
Gildan say there will further announcements as they integrate Anvil into Gildan and they plan to continue their drive for growth in the UK and European markets