The transaction will combine Knights Apparel, a seller of licensed collegiate apparel primarily for the mass retail channel, with Hanesbrands (NYSE: HBI), a seller of licensed collegiate apparel in university bookstores. The transaction is expected to close early in the second quarter of 2015.
Knights Apparel was acquired by Merit in July 2011 and is a licensee for colleges and universities as well as the National Hockey League. The company’s products are sold primarily through big box retailers and include t-shirts, fleeces and polos, for men, women, and youth/infant/toddler consumers. Knights Apparel has annual sales of about $180 million and is headquartered in Spartanburg, SC (www.knightsapparel.com).
Knights Apparel’s Alta Gracia business subsidiary, a fair trade/socially-conscious clothing brand, will not be a part of the transaction and will remain independent. Alta Gracia will be a stand-alone entity owned by certain members of the current Knights Apparel ownership group. “Our goal has always been to give Alta Gracia an opportunity to become an independent and sustainable business,” said Donnie Hodge, President of Knights Apparel. “Because of the partnership and support we continue to receive from our university and retail partners, we believe Alta Gracia is well positioned for growth in the market for ethically responsible products.”
Merit Capital Partners invests mezzanine and equity capital of $15 million to $60 million in companies with at least $5 million of EBITDA that are active in the manufacturing, distribution and services industries. The firm was founded in 1993 and is based in Chicago (www.meritcapital.com).
Guggenheim Securities (www.guggenheimpartners.com) was the exclusive financial advisor to Knights Apparel and Vedder Price served as legal counsel.
© 2015 PEPD • Private Equity’s Leading News Magazine • 2-25-15