Sources inform ''Globes'' that lingerie manufacturer Delta Galil Industries Ltd. (Pink Sheet: DELTY; TASE: DELT) is in advanced talks to acquire Gloria Vanderbilt Jeans for $350-400 million. Delta has $44 million in cash.
Gloria Vanderbilt Jeans has an annual turnover of $700-800 million, more than Delta Galil's turnover of $620 million. Besides boosting Delta Galil's turnover to around $1.5 billion, the acquisition, assuming it is closed, will result in 80% of the company sales occurring in North America and boost its label sales from 20% to 65%.
Delta Galil plans to initially finance the acquisition with bridge loans from local banks, and then through a debt and equity offering, possibly on Wall Street.
Delta CEO Isaac Dabah acquired control of the company from Dov Lautman and Sara Lee Corporation (NYSE: SLE) in 2005-07. Dabah has experience in the US jeans market. He acquired Vanderbilt Apparel Corporation with partners in 1993 and sold it to Jones Apparel Group Inc. (now Jones Group Inc. (NYSE: JNY), marketed as Jones New York) for $100 million in 2002. He stayed on as Gloria Vanderbilt CEO through December 2004.
Delta Galil's share price opened at $4.65 in New York today, giving a market cap of $108 million, and rose 1.8% on the TASE to NIS 20.
Published by Globes [online], Israel business news - www.globes-online.com - on October 10, 2011
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