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Gildan Activewear Inc. (GIL) shares were up more than 10% after the company announced it will buy U.S.-based sock maker V.I. Prewett & Son Inc. The initial purchase price is US$125-million, with further contingent payments of up to US$10-million.

Gildan said in a statement that the Prewett acquisition is expected to be accretive to Gildan's earnings per share in fiscal 2008, and to increase annual EPS by approximately US20¢ per share after the Prewett integration is complete.

The company added that it now expects to achieve or exceed the high end of its previously announced earnings guidance range for fiscal 2008 of US$1.80 to US$1.85 per share.

That represents an increase of over 40% compared with the Gildan's fiscal 2007 projected EPS of approximately US$1.30 before restructuring charges.

GIL 1-yr chart:

Source: Gildan Rises on Acquisition of Sock Maker