Gildan prices $1.2 billion senior notes to fund Hanesbrands acquisition

MONTREAL - Gildan Activewear Inc. (TSX:GIL and NYSE:GIL), an $8.56 billion market cap company with strong financial health according to InvestingPro analysis, announced Tuesday it has priced an offering of US$1.2 billion in senior unsecured notes to help finance its acquisition of Hanesbrands Inc.

The offering consists of two equal series: US$600 million of 4.700% notes due October 7, 2030, and US$600 million of 5.400% notes due October 7, 2035.

According to the company’s press release statement, proceeds will fund the cash portion of the Hanesbrands acquisition consideration, refinance Hanesbrands’ existing debt, and cover related transaction expenses.

The notes will be senior unsecured obligations ranking equally with Gildan’s other senior unsecured and unsubordinated debt. The offering is expected to close around October 7, 2025, subject to customary closing conditions.

The company is offering the notes under exemptions from registration requirements of the Securities Act of 1933. Initial purchasers will offer the notes only to qualified institutional buyers under Rule 144A or to certain persons outside the United States under Regulation S.

The notes will not be registered under U.S. securities laws or qualified for public sale in Canada, limiting their availability to exempt transactions in both jurisdictions.

Gildan manufactures everyday basic apparel including activewear, underwear and socks. The company, which generated $3.34 billion in revenue over the last twelve months, markets products across North America, Europe, Asia Pacific, and Latin America under brands including Gildan, American Apparel, Comfort Colors, GOLDTOE, and Peds. Currently trading near its 52-week high, detailed financial analysis and additional insights are available through InvestingPro’s comprehensive research reports.

In other recent news, Gildan Activewear has reported strong second-quarter financial results, with earnings per share reaching $0.97, up from $0.74 in the same period last year. This performance exceeded consensus estimates by $0.01, while revenue climbed to $919 million, surpassing estimates by $13 million and improving from $862 million in the prior-year quarter. In a significant development, Gildan has entered into a definitive merger agreement to acquire HanesBrands in a transaction valued at approximately $4.4 billion. This deal offers HanesBrands shareholders 0.102 common shares of Gildan and $0.80 in cash for each share, representing a 24% premium over HanesBrands’ closing price on August 11.

Analyst firms have responded positively to these developments. RBC Capital has raised its price target for Gildan to $68 from $61, maintaining an Outperform rating, and views the HanesBrands acquisition as a complementary fit. Similarly, BMO Capital increased its price target to $70 from $61, also maintaining an Outperform rating, and described the acquisition as creating a "global basics apparel leader." Meanwhile, CFRA raised its price target to C$76, citing Gildan’s strong Q2 performance, although it maintained a Hold rating. RBC Capital had previously initiated coverage on Gildan with an Outperform rating and a price target of $61, highlighting the company’s strong execution across its business operations.

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