Delta Galil Industries Ltd. (Pink Sheet: DELTY; TASE: DELT) has acquired assets of Los Angeles-based ladies fashion sleepware company KN Karen Neuberger for $4 million.
Delta Galil carried out the deal through Delta USA Inc. It includes acquisition of the brand, products inventory, and open procurement orders. Because KN is in financial difficulties, and with its consent, Delta signed the acquisition agreement with KN's creditor bank, a secured creditor, which has the lien on the company's assets. Delta is not acquiring KN's fixed assets, nor is it assuming KN's debts. Delta is also not acquiring KN production operations, which are carried out by Asian subcontractors.
The KN brand has been in business for over 17 years, mainly selling through US department stores. Delta said that KN's customers were not its own customers. Delta US will take on 20 KN employees.
Delta said that the KN brand is synergetic to its own operations and will expand Delta's brand lingerie and other activities in line with the company's strategy. Delta estimates that ties with the new customers and the new business will boost sales by $5-7 million in 2011 and $20 million in 2012.
Delta's share price closed at $6.65 in New York yesterday, giving a market cap of $161 million and was unchanged by midday on the TASE today at NIS 23.28.
Published by Globes [online], Israel business news - www.globes-online.com - on June 30, 2011
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