Li & Fung, the sourcing and trading firm that posted a 38% jump in first-half earnings, has agreed to buy two firms for nearly US$250 million and is looking for more.

The firm agreed to buy Regatta -- which designs, sources and markets apparel for brands such as Daisy Fuentes and Simply Vera by Vera Wang -- for US$148 million.

It also sealed an agreement to buy Peter Black International -- which supplies footwear and personal care products for European retailers such as Marks & Spencer , Body Shop and Boots -- for 48.14 million pounds (US$96.84 million).

Executives also told reporters the company might unveil an acquisition of the same scale as its purchase of Tommy Hilfiger's global sourcing operation for US$247.8 million in February.

"We've had about $850 million to spend," Bruce Rockowitz, president of the group's trading arm, told reporters. "And we've spent about $500 million, so that leaves us room to do some more."

That gives the firm about US$350 million left over from a sale of shares and bonds over the past year.

An acquisition in Japan-- which makes up roughly one percent of the firm's business-- could be next.

"Certainly, we can use M&A to correct all of the fundamental imbalances we have in our business," Group Managing Director William Fung said.

Li & Fung, which counts Wal-Mart Stores Inc. among its clients, said in March it expected its European business to grow to about 25% of revenue in 2007 -- up from 18% -- following acquisitions there last year.

As of March, Li & Fung -- which celebrated its 100th anniversary last year -- said the US made up around 70% of its turnover, but expected that to ease slightly as its business grows in Europe. (Reuters)