Gildan and HanesBrands Agree to Combine To Create a Global Basic Apparel Leader

Executive Summary

• Gildan Activewear Inc. has entered into a definitive merger agreement to acquire HanesBrands Inc. in a transaction implying an equity value of approximately $2.2 billion and an enterprise value of approximately $4.4 billion.
• The combination creates a global basic apparel leader, doubling Gildan's revenues and significantly expanding its scale, product diversification (adding iconic innerwear brands), and go-to-market capabilities.
• The transaction is expected to be immediately accretive to adjusted diluted EPS and generate at least $200 million in annual run-rate cost synergies within three years of closing.

Key Details

• Transaction Structure: HanesBrands shareholders will receive 0.102 common shares of Gildan and $0.80 in cash for each share of HanesBrands common stock.
• **Valuation and Premium: The offer implies a value of $6.00 per HanesBrands share, representing a premium of approximately 24% to HanesBrands' closing price on August 11, 2025.
• Enterprise Value: The transaction implies an enterprise value of approximately $4.4 billion for HanesBrands.
• Acquisition Multiple: The total consideration represents an acquisition multiple of approximately 8.9x HanesBrands’ LTM adjusted EBITDA or 6.3x including expected run-rate synergies of $200 million.
• Post-Closing Ownership: Upon closing, HanesBrands shareholders will own approximately 19.9% of Gildan shares on a non-diluted basis.
• Synergies: Gildan expects to realize at least $200 million in annual run-rate cost synergies within three years, with ~$50 million in 2026, ~$100 million in 2027, and ~$50 million in 2028.
• Pro Forma Financials: Inclusive of synergies, the pro forma adjusted EBITDA of the combined business would have been approximately $1.6 billion for the trailing twelve months ended June 29, 2025.
• Accretion: The transaction is expected to be immediately accretive to Gildan’s adjusted diluted EPS and 20%+ accretive to adjusted diluted EPS pro forma for expected run-rate cost synergies of $200 million.
• Financing: Gildan has obtained $2.3 billion of committed transaction financing, comprised of a $1.2 billion bridge facility and term loans totaling $1.1 billion. The cash portion of the acquisition is anticipated to be approximately $290 million.
• Debt Refinancing: Gildan expects to refinance HanesBrands’ revolving credit facility, term loans, unsecured notes, and short-term debt totaling approximately $2 billion in aggregate.
• Leverage: At closing, Gildan’s net debt leverage ratio is expected to be ~2.6x adjusted EBITDA. Gildan intends to pause share repurchases until its net debt leverage ratio approximates the midpoint of its target leverage framework (1.5-2.5x).
• Credit Ratings: Gildan expects to obtain investment grade ratings from S&P, Moody’s, and Fitch.
• Closing Timeline: The transaction is expected to close in late 2025 or early 2026, subject to HanesBrands shareholder approval and regulatory approvals.
• Strategic Review: Gildan intends to initiate a review of strategic alternatives for HanesBrands Australia, which could include a sale or other transaction.
• Guidance: Gildan reaffirmed its full year 2025 revenue and EPS guidance. It provided a three-year outlook (2026-2028) including low 20% CAGR for adjusted diluted EPS and net sales growth in the 3-5% range.

Notable Quotes

• Glenn J. Chamandy, President and CEO of Gildan: “Today is a historic moment in Gildan’s journey as we look to join forces with HanesBrands... With this transaction, our revenues will double and we achieve a scale that distinctly sets us apart.”
• Steve Bratspies, CEO of HanesBrands: “This transaction represents a powerful alignment of HanesBrands’ and Gildan’s shared commitment to quality, innovation, and excellence... Today marks the beginning of an exciting journey ahead as part of Gildan.”
• Bill Simon, Chairman of HanesBrands’ Board of Directors: “We are very pleased to have reached this agreement with Gildan which delivers significant and certain value for our shareholders, both through immediate cash and substantial upside potential of the combined company.”