HanesBrands Gains 4% Following Acquisition Of Champion Europe

Shares of Hanesbrands Inc. HBI were trading higher by more than 4 percent on Thursday after the company announced it has agreed to acquire Champion Europe.

Champion Europe designs and sells athletic apparel under the 'Champion' brand to retailers and consumers through its company-owned stores. Champion Europe also holds the trademark for the Champion brand across the Middle East and Africa.

As part of the agreement, Hanes will pay 10 times the segment's calendar 2016 earnings before interest, taxes, depreciation and amortization (EBITDA), which is expected to be approximately 20 million euros.

Hanes will fund the acquisition with debt as part of its capital allocation strategy.

"This acquisition coupled with the recent purchase of the Champion business from our licensee in Japan will unite the Champion brand globally and will give us a powerful platform for growth on every continent," said Hanes Chief Operating Officer Gerald W. Evans Jr. "Sauro Mambrini [CEO and President of Champion Europe] and the highly capable management team of Champion Europe will be a great addition to our organization."

Following the close of the acquisition, Hanes will provide investors with an update to its 2016 guidance.

"This is a great time to do an acquisition," Hanes Chairman and Chief Executive Officer Richard A. Noll said. "Our overall business is trending as expected; our recent acquisitions are performing well; we have a vision for Champion as a global brand; and we feel good about delivering double-digit earnings growth in 2016 and for many years to come."