A shopper walks near the American sports fashion brand's Champion store in Hong Kong.
Boudrol Shukrut | Getty Images
Hansbrands The company has agreed to sell its global Champion business to Authentic Brands Group in a deal valued at $1.2 billion, including a conditional cash consideration, the company announced Wednesday.
The deal could potentially reach $1.5 billion with additional contingent cash consideration of up to $300 million if performance thresholds are met, according to a Hanesbrands press release.
The company expects to receive net proceeds of $900 million from the deal, the statement said. Hansbrands said the company plans to use the net proceeds to accelerate debt reduction.
Hanesbrands shares rose more than 5% during Wednesday's trading session.
As of the end of the first quarter of 2024, Champion generated approximately $75 million in adjusted EBITDA over the past 12 months.
Chairman Bill Simon said: “We believe this transaction will enable the company to accelerate its debt reduction while positioning Hanesbrands to achieve consistent growth and generate cash flow through a focused strategy on developing its leading lingerie brands and improving its relevant supply chain.” Global level. .
The agreement, which was unanimously approved by Hanesbrands' board of directors, comes months after the company announced it was considering selling Champion.
CNBC reported in November 2023 that Authentic Brands Group and fellow brand management company WHP Global were interested in purchasing Champion.
Hanesbrands first announced it was considering offloading Champion in late September, just over a month after activist firm Barington Capital Group began pressuring Hanesbrands to cut costs and generate cash amid declining sales.
