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Tarrant Apparel to build Buffalo brand in Canada

08 Dec '06
3 min read

Tarrant Apparel Group a design and sourcing company for private label and private brand casual apparel announced that it has entered into a definitive agreement to acquire certain assets and entities comprising the Buffalo Group.

The purchase price of up to $120 million consists of approximately $40 million in cash, $15 million in promissory notes, shares exchangeable into a total of 13 million shares of Tarrant Apparel Group's common stock, earn-out payments of up to $12 million based upon the Buffalo Group achieving certain earnings targets over the next four years, a contingent payment if Tarrant Apparel's stock does not reach a minimum price over the next five years, and the assumption of debt.

The Buffalo Group is a designer and manufacturer of contemporary lifestyle brands and had revenue for the first nine months of fiscal 2006 of $75 million. It had revenue of $104 million for fiscal 2005.

The Company anticipates completing the Buffalo Group acquisition during the first quarter of 2007, and expects the acquisition to be accretive to the Company's 2007 earnings.

Guggenheim Corporate Funding, LLC is expected to provide the Company financing for the cash component of the transaction. Durham Capital acted as advisor to Tarrant Apparel in connection with the financing.

Founded in Canada in 1985, the Buffalo Group's main focus is contemporary lifestyle brands. The Buffalo Group's product line includes womenswear and menswear, along with a diverse range of products which include belts, shoes, lingerie and sleepwear, kids wear, watches and home décor operated under licensing agreements. In addition, products in development include sunglasses, swimwear and fragrances.

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