Kirkland, Latham lead on Champion’s $1.2bn sale to Authentic Brands

Kirkland acts for seller HanesBrands alongside Jones Day as Latham counsels Authentic

Kirkland & Ellis and Latham & Watkins are leading on HanesBrand’s sale of its sportswear brand Champion to Authentic Brands Group, in a deal valued at $1.2bn. 

The sale is the latest in a string of large deals that has seen Kirkland and Latham called in to advise the respective parties, including natural gas producer EQT’s $35bn acquisition of its former pipeline unit Equitrans Midstream – one of the biggest deals announced so far this year. 

A Kirkland team led by corporate partners Allie Wein, Daniel Wolf and William Lay is advising HanesBrands on the Champion sale, part of efforts by the company to streamline its business and focus on its innerwear brands. Jones Day is also advising HanesBrands on corporate governance, financing and executive compensation matters, with the effort led by Atlanta-based corporate governance partner Joel May. 

Meantime Latham is acting for Authentic in the transaction, with a corporate deal team led by New York partners Justin Hamill and Michael Anastasio alongside Century City counsel Michael Montgomery.

Authentic is a brand management company headquartered in New York that holds apparel, athletics and entertainment brands including Reebok and Forever 21. The company said the acquisition of Champion, which is known for its hoodies and athletic tops, would increase its system-wide annual retail sales to more than $32bn worldwide.

The deal has been unanimously approved by HanesBrands’ board of directors and follows the company announcing it was evaluating options for the Champion business.  

It could reach a value of up to $1.5bn through an additional contingent cash consideration of up to $300m based on achievement of performance thresholds.

HanesBrands expects net proceeds from the transaction of approximately $900m. The Winston-Salem, North Carolina-based company said it intends to focus on growing its innerwear category and increase investments across its portfolio of brands including Hanes, Bonds, Maidenform and Bali.

The deal is subject to customary closing conditions and is expected to be completed in the second half of 2024, after which HanesBrands will provide certain transition services for Champion, including operating the business in select regions through a transition period.

Goldman Sachs and Evercore are serving as financial advisors to HanesBrands on the deal, while JP Morgan Securities and BofA Securities are acting as financial advisors to Authentic.

News of the acquisition comes amid a surge in global M&A after dealmaking slumped to a 10-year low in 2023. Global M&A volumes jumped 38% in the first quarter compared to the same period last year to nearly $800bn, according to LSEG, though deals are taking longer to complete amid increased regulatory scrutiny.

Latham placed sixth in the global M&A legal advisor rankings by deal value in the opening three months of the year, working on deals worth $84.9bn. The firm had placed second in the rankings for 2023 behind Kirkland, which advised on deals worth nearly $400bn over the course of the year. Kirkland had fallen to eighth spot at the end of this year’s opening quarter after advising on $80bn of deals.

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