Tarrant Apparel Group (TAGS) was surging on word it signed an agreement to acquire clothing designer Buffalo Group.

The purchase price of up to $120 million consists of cash, promissory notes, shares, earn-out payments and the possibility of a contingent payment, plus the assumption of debt.

Buffalo Group had revenue for the first nine months of fiscal 2006 of $75 million. It had revenue of $104 million for fiscal 2005. Tarrant expects the acquisition to add to its 2007 earnings.

Shares of Tarrant were up 21% to $1.61.

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