Nautica to Buy Earl Jean

Nautica Enterprises Inc. has agreed to buy trendy Los Angeles jeans maker Earl Jean Inc. in a cash-and-stock deal potentially worth about $65 million. Publicly traded Nautica will pay $45 million in cash and 1.12 million new shares of stock, according to a news release by the New York-based apparel company. Based on Thursday’s closing price of $17.61, the stock portion of the deal would be worth $19.7 million. The deal is expected to close by early May.

Founded in 1996, Earl Jean’s $100 low-rise flared denims became the must-have jeans for affluent teens and young women, who snapped them up from high-end boutiques such as Fred Segal. Sales were $28.9 million in 2000, more than double 1999 sales of $13.8 million. The brand also is hot in Europe, Canada and Japan, which account for about half the company’s sales.

Earl Jean will operate as a wholly owned subsidiary of Nautica, and co-founders Benjamin Freiwald and Suzanne Costas Freiwald will continue to oversee day-to-day operations. Nautica sells and designs a variety of sportswear. The company reported fourth-quarter net income of $13.1 million, up 30% from the previous year.