Oxford Industries Announces Acquisition of Southern Tide

Staff Report From Metro Atlanta CEO

Thursday, April 21st, 2016

Oxford Industries, Inc. today announced that it has completed the acquisition of Southern Tide, a lifestyle apparel brand that features exceptional craftsmanship, classic design and a rich heritage, for $85 million.

Thomas C. Chubb III, Chairman and Chief Executive Officer of Oxford, commented, "We are excited to add Southern Tide to our portfolio of distinctive lifestyle brands.  Southern Tide offers a well-differentiated and comprehensive collection of high-quality apparel and has a growing, multi-channel distribution footprint.  We believe this business is an excellent fit and expect our operating platform to facilitate continued growth.  It is also a brand we know well; Oxford's relationship with Southern Tide goes back to 2009 when we began providing sourcing and production services to them.  Since then, we have been a partner and first hand observer of the strength of the brand, the quality of the management team and their clear potential to capture and manage growth.  With this acquisition, we continue to execute our strategy of delivering shareholder value through a diversified platform of great lifestyle brands."

Christopher H. Heyn, Chief Executive Officer of Southern Tide, added, "We are very pleased to be joining the Oxford team and believe our business will continue to flourish under its guidance.  Oxford has a deep appreciation for lifestyle branding and an excellent track record of growth with brands like ours. We look forward to much success in the future."

In the remaining 41 weeks of fiscal 2016, Oxford expects Southern Tide to contribute approximately $35 million in sales, $7 million in operating income and $0.20 per share of earnings.  These amounts exclude transaction expenses, integration costs and the impact of non-cash purchase accounting adjustments required under GAAP.  The impact of these items may be significant, particularly in fiscal 2016.  

The transaction was financed with borrowings under Oxford's U.S. credit facility.  The Company further noted that the transaction has been structured to allow it to realize favorable tax treatment related to a step-up in basis of certain assets, including inventory and deductible goodwill.  Under the purchase agreement, the purchase price is subject to adjustment based on net working capital at closing.