PVH Corp. has cut a $160 million cash deal to sell its Warners, Olga and True & Co. businesses, focusing the company all the more on Tommy Hilfiger and Calvin Klein.
The deal is expected to close at the end of this month and the buyer, privately owned Basic Resources, agreed to pay an up to $10 million earnout based on net sales this year.
Stefan Larsson, chief executive officer of PVH, said, “This transaction is an important next step as we continue to accelerate our focus under the PVH+ Plan to build our core brands, Calvin Klein and Tommy Hilfiger, into the most desirable lifestyle brands in the world. I want to thank our teams for building Warners, Olga and True & Co. into the beloved brands they are today. We know the Basic Resources team well as a longstanding PVH partner and are confident they are the right company to help grow these brands and ensure their continued success over the long term.”
PVH plans to use proceeds from the deal to repurchase its own shares on Wall Street.
Basic Resources was established in 1993 and specializes in “the manufacturing, distribution and marketing of high-quality basic apparel.”
Basic Resources CEO Salomon Harari said: “We are thrilled to bring the Warners, Olga and True & Co. brands into our portfolio of leading consumer brands. Under these powerful brands, PVH has built a business that offers innovative, solution-oriented products that strongly resonate with consumers. We look forward to welcoming the team and leveraging our resources and expertise in the market to drive continued growth by offering customers well-designed, high-quality products.”
PVH was advised by investment bank Solomon Partners and legal adviser Lowenstein Sandler on the deal while Basic Resources’ legal advisor was Sills Cummis & Gross.
Dealmakers have been busy lately despite the high interest rates, which make it more expensive to borrow money for acquisitions.
While some of the transactions this year have been flashy — like Tapestry Inc.’s pending acquisition of Capri Holdings or Brikenstock’s IPO — others, like PVH, are using the moment to focus in on key parts of their business.
HanesBrands Inc., for instance, is in the process of exploring options for its struggling Champion business. The market is also closely watching VF Corp.’s new CEO Bracken Darrell to see if he starts to tighten the company’s portfolio, which includes Timberland and Supreme, as well as the powerhouse The North Face and the firm’s big turnaround effort, Vans.
