Hanesbrands to sell Champion brand to Authentic Brands in $1.2 billion deal

Core Viewpoint - Hanesbrands has agreed to sell its global Champion business to Authentic Brands Group for a transaction valued at $1.2 billion, with potential to reach $1.5 billion based on performance thresholds [1][2]. Group 1: Transaction Details - The deal includes a contingent cash consideration of up to $300 million if certain performance thresholds are met [1]. - Hanesbrands expects to receive net proceeds of $900 million from the transaction, which will be used to accelerate debt reduction [1][2]. Group 2: Financial Impact - Following the announcement, Hanesbrands shares surged approximately 12% during premarket trading [2]. - As of the end of Q1 2024, Champion generated around $75 million of adjusted EBITDA [2]. Group 3: Strategic Context - The agreement was unanimously approved by Hanesbrands' board of directors and follows months of consideration regarding the sale of Champion [3]. - The decision to consider selling Champion was influenced by pressure from activist firm Barington Capital Group to cut costs and generate cash amid declining sales [4].