UPDATE 3-Hanesbrands to buy collegewear maker GearCo for $55 mln

* Hanesbrands to also assume $170 mln debt

* Says deal to add $0.20 to EPS in 1st year after closing * Sees $0.30/shr gain from second year * Shares rise 8 percent (Recasts; adds CEO comments, updates share move)

By Nivedita Bhattacharjee

BANGALORE, Aug 10 (Reuters) - Hanesbrands Inc (HBI.N) said it will buy privately held GearCo Inc, a seller of logoed T-shirts and other sportswear to college students, for about $55 million in cash, sending its shares up 8 percent Tuesday.

Known for its innerwear, Hanesbrands is looking to strengthen its footing in the outerwear market with its first acquisition as a standalone company.

The company was spun off from Sara Lee Corp SLE.N in 2006.

"The first deal happens to be in outerwear, but we are not limiting ourselves to just that," Hanesbrands Chief Executive Richard Noll told Reuters.

Besides its own Gear for Sports brand, GearCo sells apparel for Hanesbrands under the Champion label and also sells Under Armour Inc (UA.N) merchandise under license.

"(GearCo's) strategy is to sell their own sports gear at the opening price points. Champion is the second tier of the price point and Under Armour is the premium price point line," CEO Noll said.

Under the deal, which will boost Hanesbrands sales by about 5 percent in 2011, the Under Armour license will be transferred to Hanesbrands, Noll said.

Post acquisition, about 20-25 percent of Hanesbrands' outerwear segment sales will be from graphic apparel containing letters or logos.

The company, whose brands include Hanes, Champion, Playtex and Wonderbra, will also assume $170 million of GearCo debt, which it expects to retire.

The deal, expected to close in the fourth quarter, will add about 20 cents to Hanesbrands' earnings per share in the first year after closing and 30 cents per share in the second year.

GearCo reported sales of $225 million in its fiscal 2010 year ended in June.

Hanesbrands expects to use 2010 free cash flow to pay for the deal and does not see the deal hurting fourth-quarter earnings as it requires no restructuring or write-offs.

Shares of the company were up 5 percent at $22 in afternoon trade on the New York Stock Exchange. They touched a high of $27.85 earlier in the session. (Additional reporting by Viraj Nair in Bangalore; Editing by Gopakumar Warrier and Vinu Pilakkott)