Investors Cheer HanesBrands New Buyback Program And Acquisition

Hanesbrands Inc.HBIsaid that it has entered into an agreement to acquire Pacific Brands Limited, an Australia-based seller of underwear and intimate apparel for AUD 1.15 a share, or roughly $800 million. Pacific Brands sells its products mostly in Australia with some distribution in New Zealand, the United Kingdom and Asia. Hanesbrands expects its acquisition to be immediately accretive to its adjusted earnings per share and deliver an after-tax internal rate of return in the mid-teens. Hanesbrands added the transaction is expected to deliver full benefits within 3 years of the acquisition, including attaining an adjusted operating profit of approximately $100 million which will contribute approximately $0.25 to its adjusted earnings per share. "Pacific Brands is a natural addition to the HanesBrands portfolio with its strong market-leading brands that will be complemented by our global supply chain," Hanes Chairman and Chief Executive Officer Richard A. Noll said. "In the span of 10 years, we have transformed the company through acquisitions and our Innovate-to-Elevate initiatives. We have tripled operating profits and expanded from a $4 billion company concentrated in the United States to a $7 billion global underwear and activewear powerhouse spanning the Americas, Europe and Asia-Pacific. This foundation will serve as a catalyst for even further growth and value creation for the foreseeable future." In a separate announcement, HanesBrands said that it its Board of Directors approved a new share buyback program for up to 40 million shares, valued at more than $1 billion as of Thursday's share price. The share authorization program has no expiration date and replaces the prior share repurchase program in which 38 million shares of a total 40 million authorization were repurchased.