"Monarchy's current annualized sales are approximately $20 million. For fiscal 2008, this acquisition is anticipated to contribute revenues in the $25 million $30 million range and be accretive to diluted earnings per share by $.03 $.05. This Los Angeles-based enterprise will operate as an autonomous business operating unit."
"We continue to look at other acquisition opportunities which complement our upscale emphasis and to repurchase additional Hartmarx shares opportunistically, pursuant to the previously announced authorization to acquire up to 2 million common shares. To-date, Hartmarx has repurchased slightly in excess of 1.6 million shares at an average cost of $6.71," Mr. Patel concluded.
The Monarchy management team will continue to report to Eric Kim and Henry Kim. Eric Kim commented, "Our business has excellent growth potential and we were seeking a partner who shares our values of product quality and controlled retail distribution."
"With our new affiliation with Hartmarx, we envision additional opportunities for product line extensions, new brand development, increased international distribution and licensing. We are very excited to become a member of the Hartmarx family of companies."
The terms of the transaction include a cash payment at closing of $12 million plus the assumption of certain liabilities.
Additional contingent amounts would be payable annually over a seven-year period commencing with fiscal 2008 if specified earnings levels are achieved.
This all cash transaction has been financed from internally generated cash flow and utilizing availability under the Hartmarx Senior Credit Facility.
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