Delta Apparel, Inc. has completed the sale of its yarn manufacturing plant in Edgefield, South Carolina to Parkdale America, LLC for $10 million.
In conjunction with the sale transaction, DLA entered into a five-year agreement with Parkdale to supply its yarn requirements. During this five-year period, DLA will purchase exclusively from Parkdale all yarn required by Delta Apparel and its wholly owned subsidiary, M. J. Soffe Co. for use in manufacturing operations. The purchase price of yarn will be based upon the cost of cotton plus a fixed conversion cost.
Robert W. Humphreys, President and CEO, commented, “The sale of the Edgefield Plant completes our long-term yarn strategy of obtaining high quality, low cost yarn while reducing our working capital investment and eliminating our need for future capital expenditures in yarn manufacturing. Our business partnership with Parkdale through the supply agreement will allow us to acquire quality yarn that has been manufactured from the most modern equipment available. We will use the proceeds from the sale of the plant and the reduction in working capital needs to reduce our debt and continue our investment in our marketing and distribution strategies that should grow our overall business.”
