Kellwood Company said it completed the sale of its Smart Shirts manufacturing operations and related real estate assets in two separate transactions that grossed approximately $162 million in cash.
Kellwood received approximately $121 million in cash at closing from the sale of the Smart Shirts business to Youngor Group Co., Ltd. Separately, the company sold its Smart Shirts real estate assets in Hong Kong to Bright Treasure Development Ltd. for approximately $41 million in cash.
“This previously announced sale is an important step in the execution of our long-term financial and strategic plans. We significantly reduced our percentage of private label business and eliminated capital-intensive manufacturing from our operations while enhancing our focus on the
development of lifestyle brands with the strongest opportunities for sales and earnings growth,” said Robert C. Skinner, Jr., chairman, president and chief executive officer.
The proceeds from the transactions will be used to repurchase shares and reduce debt. On Jan. 3, 2008, Kellwood announced that the Board of Directors authorized the Company to enter into an $80 million accelerated share repurchase program.
“The repurchase of our shares is a tremendous investment opportunity and is indicative of the boards confidence in our ability to execute on our strategic initiatives,” added Skinner. “The use of the proceeds from these transactions will enhance shareholder value and strengthen our balance sheet while maintaining the financial flexibility for future investments in our business.”
UBS Investment Bank acted as financial advisor to the Company in connection with the sale of the Smart Shirts business.
