German company Adidas AG, which designs and manufactures sports shoes, clothing, has agreed to sell its Philadelphia-based sportswear brand Mitchell & Ness.
The buyer is a newly-formed entity formed by U.S. private equity firm Juggernaut Capital Partners.
Financial terms of the deal were not disclosed. Adidas said the sale will result in a one-time gain in a low to medium double-digit million euro range, Reuters reported.
Mitchell & Ness is engaged in the sale of nostalgia headwear and apparel. The brand, which Adidas bought Mitchell & Ness in 2007, has licensing agreements with major American sports leagues including NBA, NHL, MLB and NFL.
The company is selling the brand because it wants to focus on performance sport. In statement, Adidas said that it plans to reinvest the proceeds of the sale into its “Creating the New” strategy, according to a statement.
“Nostalgia headwear and apparel is not core to this strategy and the sale of Mitchell & Ness will allow us to reduce complexity and pursue our target consumer more aggressively with our core brands,” Adidas CEO Herbert Hainer said.
The sale is expected to close in the second quarter, according to Adidas, which is the second-biggest sportswear manufacturer in the world. The position is being occupied by Nike.
Recently, the company announced plans to unload most of its loss-making golf business. It is going to put more focus on the athletic footwear and apparel market.
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