The deal is comprised of $21 million in cash and $5 million for raw material and work in progress for the current swim season, according to the company. The $5 million is to be collected by drawing upon letters of credit as finished goods are shipped, the apparel firm said. In addition, there is an earn-out provision in the sales agreement in the event that certain future business targets are met.
"The sale of these businesses is consistent with our prior announcement to realign the Swimwear Group to enhance its future growth and profitability. While Anne Cole, Cole of California and Catalina are strong brands with important positions in their respective channels, their sale allows our team to focus its time and resources on those brands and businesses with the greatest long-term growth potential for Warnaco," said Helen McCluskey, president of Warnaco's Intimate Apparel and Swimwear Groups, in a statement.
William S. Susman, president and chief operating officer of investment banking firm Financo Inc., which represented Warnaco in the deal, described the transaction as a "win-win" for the companies involved. "Warnaco was able to realize a fair price for these brands and is able to remain focused on their core businesses," Susman said. "In Mocean is able to increase their already successful swim business with complementary operations."
Zvi Ben-Haim, president of In Mocean Group, said in a statement that as the company grows, "we believe these great brands will nicely complement our existing swimwear businesses."
Warnaco, headquartered in New York, is an apparel firm that manufactures primarily men's and women's sportswear and intimates.