Nogales Investors has agreed to sell
Dick's Sporting Goods, Inc. and Chick's Sporting Goods, a privately held corporation, have entered into a definitive stock purchase agreement whereby Dick's will acquire Chick's Sporting Goods. Under the terms of the agreement, Dick's has agreed to pay approximately $40 million in cash for the outstanding equity of Chick's. Including the assumption of approximately $31 million of indebtedness, the transaction values Chick's at approximately $71 million, and will be financed using Dick's existing credit facility. Chick's shareholders have the opportunity to earn up to $5 million in additional consideration, upon satisfaction by Chick's of certain specified performance criteria through June, 2008.
Completion of the transaction is contingent upon various customary conditions. The transaction is anticipated to be completed on or before December 31, 2007.
Chick's currently operates 15 specialty sporting goods stores in Southern California averaging ~50,000 square feet, and generated over $120 million in sales during the year ended June 30, 2007. Two additional store leases have been signed and those stores will open as Dick's stores in 2008 and 2009.
“Chick's Sporting Goods is well positioned in several important
“We are pleased to be part of the Dick's Sporting Goods family. The resources and expertise that are available from Dick's, combined with our knowledge and experience in the California marketplace will provide our customers with a great shopping experience,” added James M. Chick, CEO of Chick's Sporting Goods.
Dick's management anticipates the acquisition will be marginally accretive in fiscal 2008 from an earnings perspective, as Chick's four wall operating profitability is partially offset by interest expense, acquisition and integration costs. Dick's expects the acquisition will be neutral from an earnings perspective for the balance of fiscal 2007. We plan to provide earnings guidance for fiscal 2008 with Dick's year end earnings release in March 2008, consistent with Dick's standard practice.
About Dick's Sporting Goods, Inc.
Dick's Sporting Goods, Inc. is an authentic full-line sporting goods retailer offering a broad assortment of brand name sporting goods equipment, apparel, and footwear in a specialty store environment. As of November 3, 2007, the Company operated 340 stores in 36 states primarily throughout the eastern half of the U.S. The Company also owns Golf Galaxy, a multi-channel golf specialty retailer, with 77 stores in 29 states, ecommerce websites and catalog operations.