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Wachovia Keeps Outperform on Oxford Industries


Oxford Industries (OXM) agreed to acquire Ben Sherman Ltd. for $146 million. Wachovia sees the deal as a terrific strategic fit for Oxford Industries.

Analyst Joseph Teklits says the acquisition should add $150 million in sales and 20 cents to 25 cents to his earnings per share estimate for fiscal year 2005 (ending May). He says the acquisition price of around 1 times sales and 7 times to 8 times estimated EBITDA appears reasonable and in line with the price for Tommy Bahama and industry standards. He sees a terrific strategic fit, providing Oxford with a top emerging men's wear brand, but with a customer and distribution base different from Tommy Bahama.

He notes the company also expects to exceed 85 cents to 88 cents fourth-quarter EPS guidance; he had a 87 cents estimate. He expects more details on a 4 p.m. conference call. He rates the stock outperform.


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