We have become a diversified branded apparel company through acquisitions and exclusive license agreements, which have added well-recognized brands and licensed properties to our portfolio, expanded our product offerings and broadened our distribution channels and customer base.
||Date of Acquisition/License
||January 1, 2011
|The Cotton Exchange
||July 5, 2010
||December 28, 2009
||October 1, 2009
|To The Game
||March 29, 2009
||October 2, 2006
||October 3, 2005
||August 22, 2005
||October 3, 2003
Salt Life Exclusive License Agreement
Salt Life is an authentic, aspirational and lifestyle brand that embraces those that love the ocean and everything associated with living the Salt Life. Founded in 2003 by four avid watermen from Jacksonville Beach, Florida, the Salt Life brand has widespread appeal with ocean enthusiasts worldwide. From fishing, diving and surfing, to beach fun and sun-soaked relaxation, Salt Life says "I live the Salt Life".
"We're excited that IMG Sports Licensing chose Delta Apparel to market Salt Life. The brand has a strong following with beachgoers and ocean lovers across the globe," said Robert W. Humphreys, Chairman & Chief Executive Officer of Delta Apparel, Inc. "Salt Life is a widely recognized sub-culture amidst four unique market segments - surfers, divers, fishermen and beach goers. Our vision is to develop authentic and compelling product for each of these groups of enthusiasts. We are confident that our combined experience will allow us to successfully open new channels of distribution, attract new customers, expand the product offerings and provide meaningful growth opportunities for the future."
The agreement gives Delta Apparel exclusive rights for all apparel, headwear, decals and bags. In addition, we will operate Salt Life's e-commerce store at www.saltlife.com. In January 2012, we also signed an exclusive license agreement for footwear. The Salt Life product line is managed in our To The Game business unit within our branded segment.
The Cotton Exchange Acquisition
The Cotton Exchange designs and markets decorated casual apparel to college bookstores, the U.S. military and other retail accounts. On June 11, 2010, we formed a new North Carolina limited liability company, TCX, LLC, as a wholly-owned subsidiary of M.J. Soffe, LLC. Pursuant to an Asset Purchase Agreement dated July 5, 2010, on July 12, 2010, TCX acquired substantially all of the net assets of HPM Apparel, Inc. d/b/a The Cotton Exchange, including accounts receivable, inventory, and fixed assets,
and assumed certain liabilities. The total purchase price, which included a post-closing working capital adjustment, was $9.9 million. No goodwill or other intangible assets were recorded in conjunction with the acquisition of The Cotton Exchange. Effective January 1, 2012, TCX was merged into its parent entity M.J. Soffe, LLC for reasons of corporate simplification and no longer exists as a separate entity.
The Cotton Exchange has a strong reputation selling USA made collegiate apparel to college bookstores under “The Cotton Exchange” brand. The Cotton Exchange was formed in 1984 and is recognized in the industry for the quality of its garments, graphic designs, and most importantly its service to customers.
The Cotton Exchange is headquartered in Wendell, North Carolina and is operated as the bookstore division of Soffe within our branded segment.
Art Gun Acquisition
Through its innovative technology or "virtual art studio", Art Gun provides shoppers the ability to design apparel products by choosing different styles, colors and graphics to create their one-of-a-kind customized garment. Art Gun's unique software application can be fully integrated into any company's e-commerce platform, allowing Art Gun to manage the entire process from web design and integration to digitally printing and shipping the garment. The total purchase price included $1 million paid in cash at closing and contingent payments due to the Art Gun sellers if performance targets are met by Art Gun during each of the fiscal years beginning on July 4, 2010 and ending on July 1, 2017. Art Gun is headquartered in Miami Lakes, Florida and is reported within our branded segment.
Robert W. Humphreys, Chairman & Chief Executive Officer of Delta Apparel, Inc., commented, “We are excited to acquire what we think is one of the most compelling new ideas to emerge for the retail industry in some time. Art Gun dovetails with our existing operations and provides us with a direct entrée into what we believe is a $1 billion customized apparel market. At the same time, Art Gun brings with it exciting technology, expertise in digital printing and a strong management team that we believe provides new growth opportunities for Delta Apparel, Inc.”
Realtree Outfitters Exclusive License Agreement
In October 2009, we entered into a licensing agreement with Jordan Outdoor Enterprises, Ltd. to be the exclusive marketer and producer of Realtree Girl® and Realtree Outfitters® casual apparel and headwear. The Realtree Girl and Realtree Outfitters collections feature a broad range of fashion apparel providing outdoor enthusiasts with trendy casual clothing. These collections are sold through a wide range of distribution channels including outdoor retailers, sporting goods stores and department stores. The agreement also gives Delta Apparel, Inc. non-exclusive use of the Realtree and Team Realtree® brands for casual apparel and headwear.
The Realtree Girl and Realtree Outfitters product lines are managed in our To The Game business unit within our branded segment.
To The Game Acquisition
On March 29, 2009, our wholly-owned subsidiary, To The Game, LLC, purchased substantially all of the assets of Gekko Brands, LLC, a premier supplier of licensed and decorated headwear sold under the brands of The Game™ and Kudzu™. The Game™ and Kudzu™ have extensive license agreements including most major colleges and universities, motorsports properties, Churchill Downs, and various resort properties. The Game™ was founded in 1986 as a premier headwear supplier to colleges and universities. Its founder, Neil Stillwell, remains a vital and active leader in the business. The Kudzu™ brand was formed in 1993 to design, import and sell headwear and jackets to NASCAR teams just as The Game™ had done for colleges.
The purchase of this business is in keeping with our strategy of acquiring brands, licensed properties and operating companies that expand our channels of distribution. We believe these brands, combined with the sourcing, marketing, art, and distribution skills of To The Game management, provide significant growth opportunities for Delta Aparel, Inc. The acquisition was financed through our asset-based secured revolving credit facility. No goodwill or intangibles were recorded on our financial statements in connection with the acquisition.
To The Game continue to be headquartered in Phenix City, Alabama and is reported within our branded segment.
On October 2, 2006, we completed the acquisition of FunTees, Inc. Founded in 1972, FunTees is in the business of designing, manufacturing, marketing, and selling private labeled custom knit t-shirts primarily to branded sportswear companies. We believe that the strength of FunTees is its flexibility to custom-manufacture products in a variety of garment styles, fabrics and colors and its ability to decorate and package products for retail in its offshore facilities. We integrated the FunTees textile operations into our existing manufacturing platform to improve manufacturing efficiencies and created cost savings in our combined business.
FunTees is operated as a division of our Delta Activewear business unit and is reported within our basics segment.
Intensity Athletics Acquisition
On October 3, 2005, our wholly-owned subsidiary, M. J. Soffe, purchased substantially all of the assets of Intensity Athletics, Inc. and its business of designing, manufacturing, and marketing athletic apparel. Intensity Athletics began outfitting teams in 1990 on the belief that better garments in sports will help free up an athlete to perform to his/her highest potential. Intensity products are primarily sold through team dealers and sporting goods stores nationally.
The Intensity product line is sold through the M.J. Soffe business unit and is reported within our branded segment.
On August 23, 2005, we acquired substantially all of the assets of Liquid Blaino Designs, Inc. d/b/a Junkfood Clothing. The Junk Food brand started in 1998 as a t-shirt line with nostalgic licenses such as Twister, Candy Land and My Little Pony. Over the years, it has experienced impressive growth through innovative designs and a great sense of style.
The total purchase price for Junkfood Clothing consisted of $20 million of cash (subject to a post-closing adjustment based on the actual working capital purchased), a $2.5 million seller promissory note, and contingent payments with respect to each of the four fiscal years following closing, payable if certain performance targets were met.
Robert W. Humphreys, President and CEO, commented, “We look forward to having Junkfood Clothing join our expanding business operations. The purchase of Junkfood keeps with our strategy of acquiring profitable apparel operations that expand our channels of distribution.”
Junkfood Clothing is headquartered in Los Angeles, California and is included in our branded segment.
On October 3, 2003, Delta Apparel completed the acquisition of all of the outstanding capital stock of M. J. Soffe Co. M. J. Soffe Co. manufactures, markets, and sells casual and athletic apparel. It has a textile and sewing facility in Fayetteville, North Carolina, as well as two additional sewing plants, one each in Bladenboro and Rowland, North Carolina. In addition, M. J. Soffe Co. contracts approximately 30% of its sewing requirement from two 50% owned facilities in Costa Rica. M. J. Soffe Co. leases its primary distribution center in Fayetteville, North Carolina and also leases space for satellite distribution facilities in other parts of the United States.
M. J. Soffe Co., a North Carolina corporation, was founded in 1946 and has a long history of profitability and growth in the branded activewear market. The Soffe® brand is well recognized at sporting goods retailers and department stores. In addition, Soffe supplies college bookstores and produces activewear products for the U.S. military.
In connection with the acquisition, we paid approximately $43.5 million in cash, issued a promissory note to the selling individuals in the aggregate principal amount of $8.0 million and paid approximately $8.5 million to satisfy all outstanding bank debt of M. J. Soffe Co. Also, additional amounts were payable to the selling individuals in cash if specified financial performance targets were met, and approximately $4.8 million was paid related to this.
Soffe is headquartered in Fayetteville, North Carolina and is included in our branded segment.