Hanesbrands Inc., a maker of bras and underwear, said Thursday it has completed a debt refinancing that allows it more financial flexibility to consider acquisitions.
The company used the proceeds of a $500 million notes offering and funds from its $1.15 billion credit facilities to repay other debt. The company said its goal is to reduce debt by $300 million in both 2009 and 2010, which would cut interest expense by $20 million to $25 million in 2010 and 2011.
"Our new debt structure is simpler and gives us greater flexibility to execute multiple strategies for earnings growth," Hanesbrands Chief Financial Officer E. Lee Wyatt said in a statement.
Previously, the company's debt terms allowed it only to make acquisitions of $100 million annually, but it will now be able to target takeovers in the $200 million to $300 million range. Hanesbrands also now will be able to return cash to shareholders either through share repurchases or dividends.
The company reaffirmed it expects a 5 percent bump up in net shelf space will add $200 million to sales in 2010, independent of consumer spending trends.
Hanesbrands, based in Winston-Salem, N.C., sells brands such as Champion, Playtex, Wonderbra and others.
Its shares rose 30 cents to $25.38 in after-hours trading Thursday after closing at $25.08, up 18 cents from a day earlier.