04.08.16
Ennis Inc. has announced the pending sale of its Apparel Division and certain preliminary and unaudited financial information.
On April 1, 2016, the company entered into a Unit Purchase Agreement with Alstyle Operations, LLC, pursuant to which it has agreed to sell Alstyle Apparel LLC and its subsidiaries, which constitute the company’s apparel division, to the buyer for an aggregate purchase price of $88,000,000. The purchase price includes $76,000,000 in cash to be paid at closing, subject to working capital adjustments, and an additional $12,000,000 to be paid pursuant to a capital lease covering certain company retained equipment utilized by the Apparel Division.
The capital lease calls for 60 monthly payments of $231,993.62. The closing of the transaction, which is anticipated to occur by the end of April 2016, is conditioned upon the funding of a committed acquisition loan in favor of the buyer, expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the satisfaction of other customary closing conditions.
“Given our strategic direction to focus on the further expansion of our Print Segment, the Apparel Segment was deemed to be a non-core asset,” said Keith Walters, chairman, CEO and president. “The sale of this non-core asset allows us to fully focus on our core business segment and to be able to utilize the cash from the sale of Alstyle Apparel to further expand this business segment through strategic acquisitions, through which we have been able to continually demonstrate excellent returns to our shareholders.
“In addition, given our current leverage position, the Board may also consider other uses of these funds such as, paying down debt, additional share repurchases of our company stock, and the return of capital to our shareholders in the form of a one-time special dividend,” he added.
On April 1, 2016, the company entered into a Unit Purchase Agreement with Alstyle Operations, LLC, pursuant to which it has agreed to sell Alstyle Apparel LLC and its subsidiaries, which constitute the company’s apparel division, to the buyer for an aggregate purchase price of $88,000,000. The purchase price includes $76,000,000 in cash to be paid at closing, subject to working capital adjustments, and an additional $12,000,000 to be paid pursuant to a capital lease covering certain company retained equipment utilized by the Apparel Division.
The capital lease calls for 60 monthly payments of $231,993.62. The closing of the transaction, which is anticipated to occur by the end of April 2016, is conditioned upon the funding of a committed acquisition loan in favor of the buyer, expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the satisfaction of other customary closing conditions.
“Given our strategic direction to focus on the further expansion of our Print Segment, the Apparel Segment was deemed to be a non-core asset,” said Keith Walters, chairman, CEO and president. “The sale of this non-core asset allows us to fully focus on our core business segment and to be able to utilize the cash from the sale of Alstyle Apparel to further expand this business segment through strategic acquisitions, through which we have been able to continually demonstrate excellent returns to our shareholders.
“In addition, given our current leverage position, the Board may also consider other uses of these funds such as, paying down debt, additional share repurchases of our company stock, and the return of capital to our shareholders in the form of a one-time special dividend,” he added.