Top 40 supplier Delta Apparel (asi/49172) announced Monday that its wholly-owned subsidiary Art Gun, LLC, has acquired substantially all of the assets of TeeShirt Ink, a company doing business as DTG2Go that provides digital, direct-to-garment printed products. Delta Apparel said the purchase price was $16.35 million in cash, along with additional payments contingent on performance targets.
Delta Apparel stated that DTG2Go should help increase overall company revenue by approximately $7 million during the remainder of fiscal year 2018. Delta’s first quarter for fiscal 2018 ended Dec. 30, 2017. In fiscal 2019, DTG2Go will generate about $20 million in incremental revenue and contribute approximately $0.25 accretive to per-share earnings, according to Delta Apparel.
“Art Gun’s acquisition of the DTG2Go business is another example of our continued focus on areas of our business where we expect high growth opportunities,” said Robert W. Humphreys, chairman and CEO of Delta Apparel. “We see the digital print model revolutionizing the way traditional retailers, e-retailers, and the ad-specialty industry conduct business. Over the past five years, DTG2Go has achieved notable success and we are excited to have the talented DTG2Go personnel as part of our team.”
In detailing the acquisition, Delta Apparel said that Art Gun’s name will be folded into the DTG2Go, LLC name, allowing for the consolidated digital print business to go to market under just the “DTG2Go” brand. “The integrated business will operate from multiple locations in Florida as well as a location in Nevada serving the western United States, with immediate plans to begin production in our Fayetteville, NC facility to service the northeastern United States,” Delta Apparel said in a statement. “With this acquisition, Art Gun nearly doubles its revenue and capacity, broadens its product line into posters, stickers and other items, and further enhances service levels through quicker delivery capabilities both across the United States and in over 100 countries worldwide.”
With reported 2016 North American promotional products revenue of $45 million, Delta Apparel ranked 38th on Counselor’s most recent list of the largest suppliers in the industry.