All posts from Zacks
Zacks in Our Research. Your Success.,

Why is Hanesbrands (HBI) Stock Rising Today?

On Thursday, shares of consumer goods manufacturer Hanesbrands Inc HBI are up over 4% in morning trading after news of the company’s acquisition of Champion Europe, which owns the Champion brand throughout Europe, the Middle East, and Africa.

The deal is an all-cash transaction, and will be 10 times the actual calendar 2016 earnings before taxes, interest, depreciation, and amortization and subject to cash, debt, and working capital adjustments. Champion Europe, based in Italy, expects net sales for 2016 to be over €190 million. It is expected to close mid-year 2016.

Hanesbrands expects to use its strong balance sheet to help fund the acquisition with debt. After the deal closes, Champion Europe will be part of the company’s global Champion division. Current CEO and president of Champion Europe Sauro Mambrini will stay with Hanesbrands to oversee operations.

“The acquisition coupled with the recent purchase of the Champion business from our licensee in Japan will unite the Champion brand globally and will give is a powerful platform for growth on every continent,” said Hanesbrands Chief Operation Officer Gerald W. Evans Jr. “Sauro Mambrini and the highly capable management team of Champion Europe will be a great addition to our organization.”

When the deal closes, Hanesbrands plans to update its financial guidance to reflect the closing timing, the Champion Europe outlook, and any currency considerations.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 DaysClick to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
HANESBRANDS INC (HBI): Free Stock Analysis Report
To read this article on click here.