SEMINOLE, Fla. – Superior Uniform Group, Inc. (NASDAQ: SGC), a leading provider in the uniform and apparel industry, announced a significant expansion of its healthcare division through the acquisition of CID Resources, Inc., a prominent branded medical uniform company. The definitive agreement, finalized on May 2, 2018, marks a strategic move for Superior Uniform Group to enhance its presence in the rapidly growing healthcare apparel market.
CID Resources, based in Coppell, TX, is recognized for its strong portfolio of brands, most notably WonderWink®, a leading retail scrub brand favored by medical professionals. The acquisition, valued at approximately $88.4 million, encompasses all outstanding stock of CID, positioning Superior Uniform Group to leverage CID’s established brand recognition and retail network.
Acquisition Details: Strengthening Superior Uniform Group’s Market Position
The acquisition of CID Resources is a calculated step by Superior Uniform Group to broaden its offerings in healthcare uniforms. CID’s portfolio includes not only WonderWink® but also successful licensed scrub brands like Carhartt® and Vera Bradley®, catering to diverse segments within the medical and lifestyle markets. These brands have carved out significant niches by focusing on innovation, style, fit, and functionality, aligning with the evolving needs of healthcare professionals.
The financial structure of the deal involved approximately $84.4 million in cash, net of acquired cash and adjustments, along with the issuance of around 150,000 shares of Superior Uniform Group common stock. This stock purchase deal was completed on May 2, 2018. CID’s impressive financial performance in 2017, with net sales of $65.3 million, underscores the strategic value of this acquisition. Superior Uniform Group anticipates the acquisition to be accretive to its earnings per share and overall operating results throughout 2018 and beyond.
Strategic Rationale and Management Perspectives
Michael Benstock, CEO of Superior Uniform Group, emphasized the company’s long-term strategy of utilizing acquisitions to drive growth and profitability. He highlighted the successful integration of HPI years prior as a testament to their acquisition strategy within the uniform sector. Benstock expressed confidence that the CID acquisition would similarly enhance sales opportunities across their customer base and significantly strengthen Superior Uniform Group‘s position in the healthcare uniform market.
“We have always considered acquisitions as a vehicle to accelerate our growth and add to our bottom line,” stated Benstock. “Our acquisition of HPI years ago was a great example of our success at doing so in the uniform space. We believe that CID will be no exception, as it will enhance our current sales opportunities with our other uniform customers.”
CID Resources will operate as a wholly-owned subsidiary of Superior Uniform Group, maintaining its headquarters in Coppell, Texas, and will manage Superior Uniform Group’s Direct Healthcare channel. Crucially, CID’s experienced management team will join Superior Uniform Group, ensuring continuity and leveraging their expertise to drive growth within the healthcare division. H.P. Park, President of CID, expressed enthusiasm about the acquisition, noting it as a pivotal opportunity to elevate CID’s business by capitalizing on Superior Uniform Group‘s extensive resources and infrastructure.
“This acquisition will allow us to take CID to the next level as we leverage Superior’s relationships, sourcing, technology, distribution, and financial resources,” said Park.
Financial Strength and Future Outlook for Superior Uniform Group
To facilitate the acquisition, Superior Uniform Group amended and restated its credit agreement with Branch Banking & Trust Company, increasing its revolving credit facility to $75 million and securing an additional $85 million term loan. This financial maneuver demonstrates Superior Uniform Group’s robust financial standing and its proactive approach to funding strategic growth initiatives. The extended credit facility and term loan provide Superior Uniform Group with financial flexibility to support the integration of CID Resources and pursue further growth opportunities.
The acquisition of CID Resources by Superior Uniform Group represents a significant development for both companies and the broader uniform industry. By integrating CID’s strong brands and retail expertise, Superior Uniform Group is poised to solidify its leadership in the healthcare uniform market, offering an expanded range of retail-focused uniform solutions and enhanced service to its customers. This strategic acquisition aligns with Superior Uniform Group’s commitment to growth, innovation, and providing superior value in the uniform and apparel sector.
About Superior Uniform Group, Inc.
Superior Uniform Group (established in 1920) is a well-established provider of uniforms and related products, known for its award-winning service and extensive portfolio of brands. Operating through a shared services model, Superior Uniform Group delivers customized support across its divisions, ensuring efficiency and customer satisfaction. Key brands under Superior Uniform Group include Fashion Seal Healthcare®, Superior I.D™, and HPI Direct®, each recognized as leaders in their respective markets. Beyond uniforms, Superior Uniform Group also encompasses BAMKO®, a major promotional products company, and The Office Gurus®, a global call center support provider, highlighting the diversified capabilities within the Superior Uniform Group portfolio. With a strong focus on customer service and a “Customer 1st, Every Time!” philosophy, Superior Uniform Group continues to outfit millions of Americans daily, reinforcing its position as a trusted and leading uniform solutions provider.
For more information about Superior Uniform Group, please visit www.SuperiorUniformGroup.com.
Forward-Looking Statements
This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, regarding the potential benefits of the CID Resources acquisition for Superior Uniform Group. These statements are subject to risks and uncertainties, and actual results may differ. For a comprehensive list of risk factors, please refer to Superior Uniform Group’s filings with the Securities and Exchange Commission.
