The Blackstone Group will acquire the hosiery manufacturing company Gold Toe Investment—itself owned by private equity firm Vestar Capital—and merge it with Moretz, a manufacturer of socks for The Gap, Old Navy, Wal-Mart and other retailers.
Blackstone will own 65 percent of the combined company in a transaction worth $400 million including debt, Blackstone principal Ben Jenkins told Bloomberg News. Moretz CEO John Moretz will be the second largest shareholder, and Vestar Capital will retain a minority share. The combined annual sales of the two sockmakers is approximately $350 million.
Gold Toe, whose name was changed from Great American Knitting Mills in 2002, was advised in the deal by Bear Stearns and Devon Value Investors, while Moretz was advised by Financo.
North Carolina-based Gold Toe was founded in 1934 and is the second-largest branded sock company in the United States. Moretz, also headquartered in North Carolina, was founded in 1946 and is the top-selling maker of socks for the sporting goods sector.
Blackstone’s private equity group is currently investing its fifth fund with commitments of $15.6 billion, the largest private equity fund ever. Its holdings span many sectors and include publisher Houghton Mifflin, amusement park Universal Studios Florida, and several hotels.