Will PVH Make A Play For Warnaco?

Looks like PVH is doing a little window shopping.

She was hardly the first to raise the possibility, but Wells Fargo Securities analyst Evren Kopelman played matchmaker Monday in a research note on what a PVH Corp./The Warnaco Group Inc. marriage might look like.

Think $9.3 billion in sales for the combined company and $1.4 billion in EBITDA in 2013 for an acquisition in mid-2012, making it the second largest apparel firm after VF Corp., which just grew larger with its planned $2.2 billion acquisition of Timberland.

The speculation follows PVH’s chief executive officer Emanuel Chirico’s recent comments that PVH would begin eyeing acquisitions again later in the year.

Warnaco has long been speculated as a possible target of PVH, Calvin Klein’s owner, since it holds the license for Calvin Klein jeans and owns the Klein underwear business.

Presuming that Polo Ralph Lauren Corp. would take back the Chaps license under a change in control provision, the Wells Fargo analyst pegged an EBITDA multiple of 8.8 times, or a $3 billion deal at $70 a share, for Warnaco.

When PVH acquired Tommy Hilfiger last year, one attraction was its European platform. The analyst reasoned that Warnaco would be attractive because of its business in Asia and Latin America, where PVH has less exposure.