Delta Apparel, Inc. has acquired substantially all of the assets of Gekko Brands, the supplier of licensed and decorated headwear sold under the Kudzu and The Game brands. Prior to the acquisition, Gekko Brands was owned by Ashworth, LLC. Ashworth acquired Gekko in July 2004 for $24 million. Ashworth was acquired by TaylorMade-adidas Golf in late 2008.
The Game and Kudzu have extensive license agreements, including most major colleges and universities, motorsports properties, Churchill Downs, and various resort properties.
Under the new wholly-owned subsidiary, To The Game, LLC, Delta Apparel, Inc. will continue the business of providing headwear.
To The Game will continue to be headquartered in Phenix City, Alabama and all current operations will remain in place. The business employs approximately 120 people, all of whom will be retained as employees after the acquisition.
The company purchased associated inventory, accounts receivables, and fixed assets of the business, and assumed certain liabilities. No goodwill or intangibles are expected to be recorded on the companys financial statements in connection with the acquisition.
The company financed the acquisition through its asset-based secured revolving credit facility. The company exercised its $10 million accordion feature under its existing credit facility, bringing the total line of credit to $110 million, subject to borrowing base limitations.
Delta Apparel expects To The Game, LLC to add approximately $27 million in annual sales to its business and be marginally profitable, with opportunities for improved profitability in the future.
Deborah H. Merrill, vice president and CFO commented, “With the increase in our credit facility, we were able to acquire the business while improving our overall liquidity.”