Ennis Inc., a top 50 supplier located in Midlothian, Texas, completed the previously announced sale of its apparel division, Alstyle Apparel LLC and its subsidiaries, to Montreal-based supplier Gildan Activewear for an all-cash purchase price of $109,354,066.
As part of the agreement, Ennis Inc. will provide transition assistance to Gildan Activewear for certain administrative, financial, human resource and information technology matters, and will sublease from Gildan Activewear a portion of a certain property located in Anaheim, Calif., that is leased by Alstyle Apparel LLC.
Keith Walters, Ennis Inc.’s president, CEO and chairman of the board, released the following statement:
We are pleased that we have been able to close this transaction so quickly after its announcement in early May. Beginning in the summer of 2015, it has been a time-consuming process to affect the sale of this asset, and its completion will allow management to focus on the print segment and our stated goal of acquiring other printing businesses that meet our criteria. As we indicated in our earlier press release, the board may consider several options such as, paying down debt, additional share repurchases of our company stock, and the return of capital to our stockholders in the form of a one-time special dividend. We are pleased that we have been able to conclude this transaction quickly, and continue our focus on our core business. The amount of liquidity generated by this sale will mean a lot to our shareholders. It not only strengthens our balance sheet, but allows us to proceed aggressively with our strategic direction for the company.
Ennis Inc. anticipates that it will incur a pre-tax loss, ranging from $25 million to $35 million, on the sale of the apparel division to Gildan Activewear, according to a press release.
As Print+Promo reported earlier this month, Gildan Activewear was not the first company to make an offer for the apparel division. In April, Ennis Inc. had entered into a unit purchase agreement with Alstyle Operations LLC, which had agreed to purchase the apparel division for an aggregate purchase price of $88 million. Under the initial agreement, Ennis Inc. retained the right to terminate the agreement should it receive an unsolicited purchase offer for the apparel division, which was not matched by the initial buyer that, in the judgment of Ennis Inc.’s board of directors, “constituted a superior offer to the transactions contemplated by the initial purchase agreement,” via the release.