June 22, 2011 / 10:58 AM / in 7 years

UPDATE 2-Carter's to buy Canadian children's clothing retailer

* To pay $62 mln in cash

* Further $36 mln payable upon achievement of certain objectives

* Deal to add to earnings in FY11 (Adds CEO comment in paragraph 4, adds background on Bonnie Togs in paragraph 5)

June 22 (Reuters) - Children’s clothing company Carter’s Inc said it would buy its chief Canadian licensee Bonnie Togs for about $62 million to expand in international markets.

A further $36 million will be paid upon reaching certain earnings targets over a four-year period, Carter’s said in a statement.

The deal is expected to add to Carter’s adjusted earnings this year. Bonnie Togs’ net sales for the twelve-month period ended May 2011 were about C$100 million ($102.9 million) .

“We see significant potential for growth in Canada, with an opportunity to operate approximately 160 stores contributing total annual revenues of more than $200 million by 2016,” Carter’s CEO Michael Casey said.

Bonnie Togs operates 59 retail stores in Canada and sells products under the Carter’s and OshKosh B’gosh brands.

Carter’s shares closed at $30.90 on Tuesday on the New York Stock Exchange. ($1 = 0.972 Canadian Dollars) (Reporting by Viraj Nair in Bangalore; Editing by Saumyadeb Chakrabarty)

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