Authentic Fitness to Be Sold to Warnaco for $435 Million

Warnaco Group Inc., the biggest maker of Calvin Klein apparel, said Tuesday it agreed to buy Commerce-based Authentic Fitness Corp. for about $435 million in cash, after Authentic Fitness shareholders sued to get more money.

Warnaco would pay $20.80 a share, 30 cents more than it offered last month, and has said it will take on $105 million in debt. The bid is 5% more than Authentic Fitness’ closing price before the first offer was announced Oct. 10.

The agreement is part of a change in strategy for New York-based Warnaco, which sold Authentic Fitness for $85 million in 1990, and has been trying to repurchase it for the last three years.

With the acquisition, Warnaco would sell Speedo swimsuits, jackets, and cycling gear, and Authentic Fitness brands such as Ralph Lauren and Oscar de La Renta.

Warnaco sells jeans, underwear and perfumes under brand names such as Chaps by Ralph Lauren and Olga. It had sales of $1.95 billion last year. Authentic Fitness had sales of $410.8 million in its fiscal year ended July 3. The two companies will have the same chairwoman and chief executive, Linda Joy Wachner, who owned about 10% of Authentic Fitness as of last month.

On the New York Stock Exchange, Warnaco shares closed down 13 cents at $14.31; Authentic Fitness rose 88 cents to $20.38.