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Aussie underwear heads to U.S. in billion dollar takeover

Xinhua, April 28, 2016 Adjust font size:

A U.S. clothing company HanesBrands Inc has finally purchased Australian icon Pacific Brands Ltd in an all-cash offer worth 1.1 billion Australian dollars.

Aussie underwear maker Pacific Brands (PacBrands) has been implementing a significant restructure over the past several years which has seen 300 non-core brands sold and manufacturing plants closed on production shifts to Asia.

The restructure saw PacBrands -- owner of Sheridan, Jockey, Berlei and iconic Bonds brands -- post its first net profit in February in nearly four years.

"HanesBrands has recognized the work done over the past two years that has seen the board and management team under chief executive David Bortolussi's leadership re-shape and simplify the business to focus on our highest quality brands and improve operational performance," PacBrands chairman Peter Bush said in a statement to the ASX on Thursday.

The company's directors unanimously accepted Hanes' 1.15 Australian dollars (87.73 U.S. cents) per share offer, a 22 percent premium to its closing price on Wednesday to value the company at 1.1 billion Australian dollars (839.11 million U.S. dollars).

"We believe the 100 percent cash proposal from HanesBrands is compelling and represents an attractive premium to our long-term average share price and the implied 2016 EV / EBITDA acquisition multiple of 12 times compares favourably to the multiples paid in other comparable transactions," Bush said.

Hanes had been circling the underwear giant for some time but wished to wait until the board had finished restructuring.

In that time, several private equity firms had also looked to acquire the Aussie icon, but withdrew bids after failing to agree on the company's value.

Bush said the U.S. giant's proposal represented an attractive value for PacBrands shareholders and an opportunity to de-risk future growth prospects.

Should shareholders approve of the deal, PacBrands will leverage off Hanes' global supply chain network to accelerate growth plans of its iconic Bonds and Sheridan brands.

Just before the ASX close on Thursday, PacBrand's shares had rallied 21 Australian cents, or 22.87 percent to 1.16 Australian dollars. Endit