WINSTOM-SALEM, N.C. (AP) -- HanesBrands is buying underwear maker Maidenform Brands Inc. for approximately $547.6 million.
The deal would add brands like Maidenform, Flexees and Self Expressions to the Hanesbrand roster that includes Playtex, Bali, Champion, Wonderbra and its namesake Hanes.
"This business is a natural fit into our core business and meets all of our acquisition criteria," HanesBrands Chairman and CEO Richard Noll said in a statement.
HanesBrands will pay $23.50 per share, a 23 percent premium to Maidenform's $19.09 Tuesday closing price. The companies put the deal's value at about $575 million.
Maidenform — which had been evaluating its strategic options — has about 23.3 million outstanding shares, according to FactSet.
HanesBrands said Wednesday that Maidenform's average-figure bra business will complement its full-figure bra collection and that its shapewear will be a nice addition as well.
HanesBrands anticipates being able to potentially lower the costs of Maidenform products for retailers and consumers. Currently Maidenform sources its products from third-party manufacturers. With the acquisition, HanesBrands said Maidenform will now be able to take advantage of HanesBrands' company-owned manufacturing, which is supplemented by third-party manufacturers.
Maidenform CEO Maurice Reznik said that the deal was appealing in part because it provides the necessary infrastructure and resources to help grow its business.
Last year the majority of Maidenform's revenue — 57 percent — came from bra sales, while 35 percent of revenue was from shapewear sales. About 90 percent of the Iselin, N.J. company's sales were in the U.S.
HanesBrands Inc. plans to pay for the deal with available cash and short-term borrowings on its revolving credit facility. The company anticipates the transaction adding to its earnings per share in the first year after closing. It's expected that within three years the buyout will result in more than $500 million in incremental annual sales and 60 cents per share in earnings. HanesBrands, which is based in Winston-Salem, N.C., estimates its pro forma annual revenue will be more than $5 billion after the deal is complete.
Both companies' boards unanimously approved the acquisition, which is expected to close in the fourth quarter. It still needs approval from Maidenform shareholders.
Hanesbrands shares finished at $53.36 on Tuesday.