OXM & Li Fung Division Co sign deal for Womenswear Group
02 May '06
2 min read
Private label apparel marketer Oxford Industries Inc (OXM) announced that it has signed a definitive agreement to sell its Womenswear Group to a division of Hong Kong-based Li & Fung Group.
The all cash transaction includes the sale of substantially all of the assets and certain liabilities of Oxford's Womenswear Group except for accounts receivable and in-transit inventories. The sale is subject to customary closing conditions and is expected to close on or about the end of the Company's fiscal fourth quarter which ends on June 2, 2006.
“Our Womenswear Group has made a significant contribution to our success over the years and the decision to pursue its sale has been very difficult. However, we believe this divestiture is an important step in the ongoing strategic repositioning of our company,” commented J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford Industries.
“This transaction will result in a significant improvement in our balance sheet and enable us to continue to invest in the growth of our key consumer lifestyle brands as well as to pursue the acquisition of similar businesses.”
Total cash consideration at closing is projected to be approximately $37 million which equates to a projected net asset value of $12 million plus a $25 million premium over the book value of assets conveyed. After closing, retained accounts receivable will be collected by Oxford, in-transit inventories will be sold by Oxford upon delivery to Li & Fung and retained liabilities, employee bonuses, transaction expenses and taxes on the gain will be paid by Oxford, all which is currently expected to net additional cash proceeds of approximately $30 million.
marketing@alchempro.com
