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Equity Firm Acquires Stake in Maidenform

March 18, 2004|Debora Vrana | Times Staff Writer

A Los Angeles private equity firm said Wednesday that it had reached an agreement to acquire a controlling stake in Maidenform Inc., a Bayonne, N.J.-based maker of women's bras and undergarments.

Ares Management, with $4.5 billion of assets, did not disclose terms of the acquisition. However, sources familiar with similar transactions estimated the deal at about $200 million.

Maidenform was created more than 80 years ago when founders Ida and William Rosenthal invented the bra in the 1920s. It sells its brand in more than 60 countries, mostly in discount and department stores.

After sagging sales, Maidenform filed for bankruptcy protection in 1997 and emerged two years later. Recently, its owner, Los Angeles-based Oaktree Capital Management, has been looking for a buyer.

Ares, with 60 employees in Los Angeles, was formed in 1997 by certain co-founders of Apollo Management, a New York investment firm. It owns controlling stakes in several other companies, including Samsonite Corp., the luggage maker.

"Our company looks forward to accelerating our growth plans with our new strategic partner, Ares," Maidenform Chief Executive Tom Ward said.

Maidenform, which has several thousand employees, will continue to be privately held, and the current management team will remain in place, the company said.

"We are impressed with the strong brand equity ... and the significant sales and profit growth potential of the company," said David Kaplan, a partner with Ares. "We are particularly excited to partner with what we believe is a world-class management team."

Maidenform and Ares may acquire other competitors in the apparel industry to build up the brand, Kaplan said.

Late last year, a group of U.S. textile and apparel producers demanded that the Bush administration restrict the import of Chinese-made bras to protect their industry. However, Maidenform opposed that move because its products were made all over the world, including China.

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