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  • Delta Apparel, Inc. (AMEX: DLA) $123M (MarketCap) to Acquire Branded Apparel Company 0 comments
    Jul 1, 2010 1:20 PM | about stocks: DLA
    Delta Apparel, Inc. (AMEX: DLA), along with its operating subsidiaries, M. J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC, and Art Gun, LLC, is an international design, marketing, manufacturing, and sourcing company that features a diverse portfolio of high quality branded and private label activewear apparel and headwear. The company specializes in selling a variety of casual and athletic products through most distribution channels for these types of goods. Its products are sold to stores such as specialty and boutique shops, department stores, sporting goods stores, and certain products are currently being sold to college bookstores and the U.S. Military.
     
    Today, Delta Apparel signed a letter of intent and expects to acquire substantially all of the net assets of HPM Apparel, Inc. d/b/a The Cotton Exchange by July 15, 2010. HPM Apparel, Inc. d/b/a The Cotton Exchange designs and markets decorated casual apparel to college bookstores, the U.S. military and other retail accounts. The Cotton Exchange has a strong reputation selling USA made collegiate apparel to college bookstores under “The Cotton Exchange” brand. It also sells products under the brands of “TCX” and “Just for Us”. The Cotton Exchange was formed in 1984 and is recognized in the industry for the quality of its garments, graphic designs, and most importantly its service to customers.
     

    This acquisition of The Cotton Exchange continues Delta Apparel’s strategy of growing its business within the college bookstore market and further strengthens the military and retail channels. In addition, this business provides Delta additional U.S. screen print and embroidery capacity, further enhancing speed to market initiatives.
    Under the terms of the letter of intent, the acquisition will include the purchase of the associated inventory, accounts receivables, and fixed assets of the business, and assumption of certain liabilities. No goodwill or intangibles are expected to be recorded on the Company’s financial statements in connection with the acquisition. The Company expects to finance the acquisition under its existing asset-based secured revolving credit facility with no changes to the underlying terms of the credit facility. Delta Apparel expects The Cotton Exchange to add approximately $25 million in sales and be slightly accretive to earnings for the fiscal year ended July 2, 2011 with identified opportunities for growth and improved earnings in the future.

     

     
    “All of us at M. J. Soffe are looking forward to the new relationship with The Cotton Exchange,” said Ken Spires, President of M. J. Soffe, LLC. “We plan for The Cotton Exchange to continue to operate as a separate division within Soffe and to begin servicing Soffe’s existing college bookstore business. We believe The Cotton Exchange’s reputation for service and strong relationships with its customers is exactly what Soffe needs to realize its full potential within the college bookstore channel.”


    Disclosure: no positions
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