Authentic Brands Group will acquire the Champion apparel brand from HanesBrands for $1.2 billion. The deal could reach up to US$1.5 billion through an additional contingent cash consideration of up to US$300 million based on the achievement of specified performance targets.

In September, HanesBrands announced a strategic review of the Champion brand, and ultimately decided to sell the iconic brand. The decision came under pressure from activist investor Barington Capital Group, which urged the company to cut costs and increase cash flow in the face of weakening financial results. In particular, sales of the Champion brand have been declining over the past few years.

New York-based Authentic Brands Group, owned by PE firms CVC Capital Partners and HPS Investment Partners, expressed interest in Champion as early as last year. Its portfolio includes Aeropostale, Bandolino, Billabong, Brooks Brothers, Eddie Bauer, IZOD and Van Heusen.