Hanesbrands Inc.
08/13/2025 | Press release | Distributed by Public on 08/13/2025 05:01
Gildan and HanesBrands Agree to Combine To Create a Global Basic Apparel Leader (Form 8-K)
Gildan and HanesBrands Agree to Combine
To Create a Global Basic Apparel Leader
| • |
Combination will create a global basic apparel leader, with access to iconic innerwear brands and a further strengthened low-cost vertically integrated manufacturing network |
| • |
Highly complementary acquisition expands Gildan's scale, increasing the strength of our business in basic apparel |
| • |
Proven operational model expected to enable the realization of at least $200 million of annual run-rate cost synergies within three years of closing: ~$50 million in 2026, ~$100 million in 2027, ~$50 million in 2028 |
| • |
Expected to be immediately accretive to Gildan's adjusted diluted EPS1; 20%+ accretive to adjusted diluted EPS1 pro forma for expected run-rate cost synergies of $200 million |
| • |
Adjusted diluted EPS1 CAGR over the next three years is expected to be in the low 20% range |
| • |
HanesBrands shareholders to own ~19.9% of Gildan shares on a non-diluted basis upon closing |
Montréal and Winston-Salem, Wednesday, August 13, 2025 - Gildan Activewear Inc. ("Gildan") (TSX: GIL and NYSE: GIL) and HanesBrands Inc. ("HanesBrands") (NYSE: HBI) today announced that they have entered into a definitive merger agreement under which Gildan will acquire HanesBrands. This transaction implies an equity value of approximately $2.2 billion and an enterprise value2 of approximately $4.4 billion for HanesBrands, based on the closing price of Gildan common stock on August 11, 2025.
"Today is a historic moment in Gildan's journey as we look to join forces with HanesBrands. We are extremely pleased to welcome the HanesBrands' team to the Gildan family," commented Glenn J. Chamandy, President and Chief Executive Officer of Gildan. "With this transaction, our revenues will double and we achieve a scale that distinctly sets us apart. The combination with HanesBrands strengthens our positioning with an opportunity to expand the heritage "Hanes" brand presence in activewear across channels, while enhancing Gildan's retail reach for its portfolio of brands. Further, our state of the art low-cost vertically integrated platform will be utilized to enhance efficiencies and drive additional innovation. We are excited for the next stage of growth and remain focused on supporting our customers and continuing to drive long term shareholder value."
"This transaction represents a powerful alignment of HanesBrands' and Gildan's shared commitment to quality, innovation, and excellence. We have great respect for Gildan's manufacturing strength and long track record of success. We look forward to expanding upon HanesBrands' portfolio of leading innerwear brands and go-to-market expertise and opening new doors for growth and impact as part of Gildan," said Steve Bratspies, CEO of HanesBrands. "I want to extend my deepest gratitude to our associates around the world. Your dedication, hard work, and resilience have built HanesBrands into an iconic and trusted name. Today marks the beginning of an exciting journey ahead as part of Gildan and I'm particularly pleased that Gildan intends to maintain HanesBrands' strong presence in Winston-Salem."
"This transaction represents a pivotal moment in Gildan's story," said Michael Kneeland, Chair of the Board of Directors of Gildan. "Hanes is a distinguished brand with a proud legacy, and by joining forces with HanesBrands, we are forging an exceptional organization built on the strengths of both companies. Leveraging best practices and the exceptional teams from each side, we are poised to deliver outstanding value to our customers and shareholders. With the finest talent in the industry, we have an extraordinary opportunity ahead to shape the future together."
| Page 1 |
Bill Simon, Chairman of HanesBrands' Board of Directors, commented, "We are very pleased to have reached this agreement with Gildan which delivers significant and certain value for our shareholders, both through immediate cash and substantial upside potential of the combined company. As part of Gildan, HanesBrands will benefit from an even stronger financial and operational foundation that will provide new growth opportunities - helping to power further innovation, a broader product offering and greater reach across channels and geographies. We are confident that this transaction and the next chapter with Gildan is the right next step for HanesBrands and will honor and build on its long history for the benefit of all our stakeholders."
Compelling Strategic and Financial Rationale: combining complementary strengths creates a global basic apparel leader with proven operational expertise to drive significant value creation
| • |
Expanded scale and strengthened positioning. The scale and capabilities of the combined company further enhance Gildan's position in basic apparel as one of the largest global apparel players by number of units sold, with strong innovation from yarn spinning to end product, and greater supply chain capabilities to support customers. |
| • |
Strengthened and complementary go-to-market capabilities. The two businesses are ideally matched to unlock value, bringing together Gildan's leadership in activewear with HanesBrands' leading innerwear retail presence and expertise. The combination will enhance go-to-market capabilities and continued growth in all channels, by accelerating Gildan's retail penetration with its portfolio of brands while supporting the iconic "Hanes" brand growth in activewear in the retail channel. |
| • |
Enhanced product diversification and resiliency. The combination will result in meaningfully balanced category and channel exposure. The addition of HanesBrands' iconic innerwear brands enhances Gildan's product offering and diversification, broadening its consumer reach while further reinforcing its resilience to seasonal and cyclical variations. |
| • |
State-of-the-art low-cost vertically integrated manufacturing network. The combined global supply chain is expected to enhance Gildan's low-cost advantage, along with the opportunity for value creation by driving manufacturing synergies. Gildan will utilize its best-in-class low-cost manufacturing structure and operational expertise, efficiently reallocate production volumes across geographies, and optimize its network, distribution and logistics infrastructure, leaning on its proven operational capabilities. |
| • |
Significant synergy opportunity. Gildan has identified at least $200 million in expected annual run-rate cost synergies across supply chain, operations and SG&A that it expects to realize within three years, with ~$50 million to be realized in 2026, ~$100 million in 2027 and ~$50 million in 2028. Inclusive of these synergies, the pro forma adjusted EBITDA1 of the combined business would have been approximately $1.6 billion for the trailing twelve months ended June 29, 2025. |
| • |
Highly accretive financial profile. The transaction is expected to be immediately accretive to adjusted diluted EPS1 and 20%+ accretive to adjusted diluted EPS1 pro forma for expected annual run rate synergies of $200 million. |
Following transaction close, Gildan's headquarters will continue to be located in Montréal, Québec and the combined company will maintain a strong presence in Winston-Salem, North Carolina. In addition, Gildan intends to initiate a review of strategic alternatives for HanesBrands Australia, which could include a sale or other transaction.
Transaction terms
| • |
Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of Gildan and HanesBrands, HanesBrands shareholders will receive 0.102 common shares of Gildan and $0.80 in cash for each share of HanesBrands common stock. The Board of Directors of HanesBrands recommends that the HanesBrands shareholders vote in favour of the proposed transaction. |
| • |
Based on the closing price of Gildan and HanesBrands' common stock on August 11, 2025, the offer implies a value of $6.00 per HanesBrands share, representing a premium of approximately 24% to HanesBrands' closing price on such date. |
| Page 2 |
| • |
Upon closing, HanesBrands shareholders will own ~19.9% of Gildan shares on a non-diluted basis, providing HanesBrands shareholders the ability to participate in the combined entity's expected growth opportunities and synergies. |
| • |
The total consideration represents an acquisition multiple2 of approximately 8.9x HanesBrands' LTM adjusted EBITDA1 or 6.3x including expected run-rate synergies of $200 million. |
| • |
The transaction is subject to HanesBrands shareholder approval and other customary closing conditions, including regulatory approvals, and the Gildan common shares to be issued pursuant to the merger agreement being approved for listing on the New York Stock Exchange and the Toronto Stock Exchange. |
| • |
The transaction is expected to close in late 2025 or early 2026. |
Transaction financing
| • |
The implied transaction consideration is approximately 87% stock and 13% cash for every HanesBrands share. |
| • |
The cash portion of the acquisition is anticipated to be approximately $290 million. Gildan expects to refinance HanesBrands' revolving credit facility, term loans, unsecured notes, and short-term debt totaling approximately $2 billion in aggregate. |
| • |
In connection with the acquisition, Gildan has obtained $2.3 billion of committed transaction financing, comprised of a $1.2 billion bridge facility and term loans in the aggregate amount of $1.1 billion. The bridge facility provides financing to backstop an anticipated issuance of new debt securities prior to closing of the acquisition. |
| • |
At closing, Gildan's net debt leverage ratio1 is expected to be ~2.6x adjusted EBITDA1. Gildan intends to pause share repurchases until its net debt leverage ratio1 approximates the midpoint of its target leverage framework of 1.5-2.5x net debt1 to adjusted EBITDA1. Gildan's net debt leverage ratio1 is expected to be ≤2.0x within 12 to 18 months post-closing. |
| • |
Finally, Gildan expects to obtain investment grade ratings from S&P, Moody's and Fitch and remains committed to maintaining an investment grade profile in the future. |
2025 guidance and three-year outlook
Gildan is reaffirming its full year 2025 revenue and EPS guidance as detailed in its 2025 second quarter earnings press release (the "Q2 2025 Earnings Release") published on July 31, 2025. Furthermore, reflecting the impact and assuming completion of the proposed transaction, Gildan is providing a three-year outlook for the 2026-2028 period:
| • |
Net sales growth at a compound annual growth rate in the 3-5% range; |
| • |
Capex as a percentage of sales of about 3-4% per year, on average, to support long-term growth and vertical integration; |
| • |
Enhanced shareholder returns through dividends and share repurchases in line with a long-term target leverage framework of 1.5x to 2.5x net debt1 to adjusted EBITDA1; |
| • |
Adjusted diluted EPS1 CAGR in the low 20% range, starting from the midpoint of Gildan's 2025 adjusted diluted EPS1 guidance. |
The three-year outlook for the 2026-2028 period is based on, among other things, the assumptions underlying Gildan's current three-year outlook (for the 2025-2027 period) as described in Gildan's fiscal 2024 earnings press release dated February 19, 2025 and in the Q2 2025 Earnings Release, as well as the following additional assumptions: low single-digit annual net sales growth for HanesBrands during such period; the closing of the announced HanesBrands acquisition before the end of the first quarter of 2026; the successful integration of the acquired business into Gildan's existing operations; the realization in full and within the projected timeframe of the expected run-rate synergies and other benefits anticipated from the acquisition; the refinancing of HanesBrands' existing debt within the expected timeframe and on expected market terms; and the resumption of share buybacks under normal course issuer bid programs by Gildan upon return to the midpoint of Gildan's targeted 1.5x to 2.5x pro forma net debt to adjusted EBITDA leverage ratio1.
Furthermore, these assumptions are as of August 13, 2025 and are subject to significant risks and business uncertainties, including those factors described under the heading "Forward-looking statements and information" in this press release and in the Q2 2025 Earnings Release as well as the factors described in the "Risks and uncertainties" sections of Gildan's annual management discussion and analysis (MD&A) for the year ended December 29, 2024 and the interim MD&A for the quarter ended June 29, 2025.
| Page 3 |
Advisors
Morgan Stanley & Co. LLC and CIBC Capital Markets acted as financial advisors to Gildan. Morgan Stanley Senior Funding, Inc. and Canadian Imperial Bank of Commerce provided fully committed financing. Sullivan & Cromwell LLP and Stikeman Elliott LLP are serving as Gildan's legal advisors. Goldman Sachs & Co. LLC acted as lead financial advisor to Hanesbrands. Evercore also acted as a financial advisor to Hanesbrands, and Jones Day and Blake, Cassels & Graydon LLP are serving as HanesBrands' legal advisors.
Conference Call Information
Gildan and HanesBrands will hold a joint conference call today at 8:30 AM ET to discuss the proposed combination. The conference call can be accessed by dialing (800) 715-9871 (Canada & U.S.) or (646) 307-1963 (international) and entering passcode 9526280#. A replay will be available for 7 days starting at 12:30 PM EST by dialing (800) 770-2030 (Canada & U.S.) or (609) 800-9909 (international) and entering the same passcode. A live audio webcast of the conference call, a presentation as well as the replay, will be available at the following links: Gildan - August 13, 2025 and HanesBrands - August 13, 2025.
Hanesbrands Inc. published this content on August 13, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on August 13, 2025 at 11:02 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]