Hong Kong trading giant Li & Fung bought a young men's and children's apparel business in the United States for about US$400 million yesterday and said it was on the prowl for more acquisitions. Li & Fung's wholly owned subsidiary, LF USA, agreed to buy all the assets of Wear Me for US$101.8 million in cash, plus a performance-based sum of up to US$300 million, payable in annual instalments over the next five years, based on earnings growth targets before tax, the firm said yesterday. The value of Wear Me's net assets, when the acquisition is completed by next month, is US$80 million, according to Li & Fung. 'We will continue to pursue our acquisition strategy and this deal is only one of the many opportunities we are currently looking at. The pipeline of deals is strong and it's almost unprecedented that we've seen so many great opportunities,' said Bruce Rockowitz, the president of Li & Fung (Trading). The company has already completed three small acquisitions on the mainland and in Britain so far this year. 'Li & Fung management said more than once that it expects to do more acquisitions to drive revenue growth next year and has sufficient cash pile to fund the same,' wrote Vineet Sharma in a JP Morgan report. Wear Me designs and manages brands such as Calvin Klein, Timberland, Disney, Nickelodeon, Warner Brothers and Hasbro. It distributes to US retailers such as Macy's and Wal-Mart but also has a presence on the mainland and in Hong Kong, the Philippines, Thailand, India and Bangladesh. The net sales of Wear Me declined from US$746 million in 2007 to US$700 million last year, while its profit after tax and extraordinary items fell from US$13.4 million to US$11.9 million. JP Morgan's Sharma said Li & Fung was looking to the United States to lead the recovery over Europe and to this being reflected in next year's profit. '[The company] is still striving to get close to the target of US$1 billion in core operating profit by 2010. Our numbers for next year are way below at US$716 million,' wrote Sharma. Li & Fung's share price rose 3.7 per cent to HK$34.65 yesterday, its highest level this year.