Moretz, Inc. and Gold Toe Investment Corp. will combine, creating one of the largest global sock companies. The deal is backed by The Blackstone Group, a global private investment and advisory firm, which is acquiring Gold Toe and simultaneously facilitating a merger between the two companies.
In addition to a meaningful direct presence via its online and owned and operated outlet stores, the combined company
will be a leading supplier to the department store and specialty sporting goods channels and have a significant presence in the growing warehouse club and mass market channels. The company will possess a diverse portfolio of highly recognized brands across all retail channels.
Together, Moretz and Gold Toe will have the financial and management resources to pursue new growth opportunities by expanding product lines and distribution.
The senior management teams of Moretz and Gold Toe will remain with the combined company following the merger. As a result of its investment, The Blackstone Group will be the majority owner of the company; John Moretz, CEO, will be the second largest shareholder and an affiliate of Vestar Capital Partners, the current majority owner of Gold Toe, will retain a minority stake. The terms of the transaction were not disclosed.
John Moretz, CEO of Moretz, commented, “I am extremely pleased and honored that our two companies can join together and create an entity of unparalleled opportunity. The combination of Gold Toe and Moretz, coupled with Blackstones vision and financial power, will bring to the marketplace a leading collection of brands and private label capabilities to the industry.”
Gold Toe President Jim Williams stated, “The combined strengths of our new company are perfect complements. Our diversified portfolio of premium brands will target multiple price points and distribution channels across a broad customer base. The company will be uniquely positioned to capitalize on future strategic opportunities.”
Norm Alpert, Vestar Managing Director, commented, “Over the past eight years, Gold Toe has grown from a leading brand in a single channel to a broad portfolio of Gold Toe branded products in multiple channels. We are tremendously
proud of the achievements of the company and its management team and are excited about being a continuing part of the companys future in combination with Moretz.”
Ben Jenkins, Principal in Blackstones private equity group, noted, “We are delighted to be part of this compelling strategic combination. By leveraging the management teams, the brands and the distribution capabilities of Moretz and Gold Toe, we will create the industry leader and the fastest-growing hosiery company in the United States.”
In connection with the acquisition of Gold Toe, the outstanding indebtedness and preferred stock of Gold Toes wholly-owned subsidiary Gold Toe Corp. (f/k/a Cluett American Corp.) will be refinanced, including its 10 1/8% senior subordinated notes due 2008 and 12.5% senior exchangeable preferred stock due 2010.
Gold Toe Investment Corp. was advised by Bear, Stearns & Co. Inc. and Devon Value Advisors. Moretz, Inc. was advised by Financo, Inc.
