MONTREAL—In a press release detailing first-quarter earnings for 2016, Gildan Activewear announces it has entered into an agreement to acquire Alstyle Apparel LLC. The company projects the acquisition to close before the end of June 2016 and says it will update its guidance for the year once the acquisition has been finalized. Gildan has agreed to acquire Alstyle for a total cash purchase price of $110 million. As part of the acquisition, Alstyle's current operations will be integrated into Gildan's printwear business. This includes an alignment of production operations at Alstyle's manufacturing facilities in Mexico.
The decision to acquire Alstyle is designed "to expand Gildan’s market penetration in the imprinted sportswear industry in the US, Canada, and Mexico, especially strengthening our position in the western United States, where Alstyle has a strong position," says Garry Bell, vice president of corporate marketing and communication at Gildan Activewear.
Bell adds that the acquisition will allow Gildan to better service the Mexican imprinted sportswear and retail markets, and leverage the significant investments the company has made in yarn spinning operations within the United States. Alstyle operates one textile facility and three sewing operations in Mexico. Regarding staffing, Bell notes that Gildan is working with the current Alstyle management team to develop a full integration plan, of which Gildan will communicate once more details are available.
"In the interim to finalizing this (integration) plan, we will continue to operate the Alstyle business in the same manner so for employees, customers and suppliers it remains business as usual," remarks Bell.
The acquisition announcement comes less than a month after wholesale printing and apparel manufacturer Ennis Inc. announced the sale of Alstyle Apparel to Alstyle Operations LLC. In the original agreement, Ennis retained the option to consider unsolicited proposals subsequent to their agreement with Alstyle Operations. Gildan submitted such a proposal and upon reflection and review, Ennis accepted the proposal from Gildan to enter into a definitive agreement to purchase 100 percent of the equity interest in Alstyle Apparel LLC.
Update May 5, 2016 at 1:32 p.m. MST: Article updated to reflect remarks from a Printwear interview with Garry Bell, vice president of corporate marketing and communications at Gildan Activewear.
Update May 26, 2016 at 9:07 a.m. MST: Gildan announces the completion of the acquistion of Alstyle Apparel. The finalization is effective as of May 26, 2016.