PE-Backed Golf Town

Golf Town, a Canadian golf retailer backed by OMERS Private Equity, will acquire publicly traded Golfsmith International Holdings Inc. Golf Town will pay $6.10 per share in cash, representing a 32.2% premium on Golfsmith’s stock on the 30 trading days immediately preceding the announcement.

PRESS RELEASE

Golf Town, Canada’s largest specialty golf retailer, and Golfsmith International Holdings, Inc. GOLF 0.00% , announced today that they have signed a definitive merger agreement, pursuant to which Golf Town will acquire Golfsmith, a leading specialty golf retailer in the United States, for US $6.10 per share in cash. This represents a premium of 32.2% to Golfsmith stockholders based on the volume-weighted average closing prices of the Company Common Stock on the 30 trading days immediately preceding this announcement. This also represents a premium of 55.1% to Golfsmith stockholders based on the volume-weighted average closing prices of the Company Common Stock on the 30 trading days immediately preceding the announcement on March 1, 2012, that the Company was evaluating strategic alternatives, including a potential sale of the Company. The closing of the acquisition, which is subject to limited closing conditions, including regulatory approvals, is expected to occur in the third quarter of 2012. The transaction is not subject to a financing condition.

 

Golf Town is owned by OMERS Private Equity and operates 54 stores across Canada and 7 stores in the greater Boston area. Golfsmith has been in business for over 40 years and is a speciality retailer of golf equipment and related apparel and accessories.

 

The transaction will result in the creation of the world’s largest specialty golf retailer.

 

“Golfsmith is a company that we have admired for years. This transaction will give us a formidable footprint in North America and will also provide a strong platform for future growth,” said Don Morrison, Senior Managing Director and Canadian Country Head of OMERS Private Equity. “Together with management we look forward to enhancing the value proposition for the companies’ loyal customers.”

 

“We are extremely excited about this combination. Together, the businesses will have a broad multi-channel offering of retail, online, mobile and catalogue throughout North America,” said Ron Hornbaker, interim CEO of Golf Town.

 

“We have been very pleased with the building momentum at Golfsmith and I am proud of the accomplishments that our team has made over the last three years in developing a solid foundation for long term growth. We hold Golf Town in the highest regard and believe them to be an ideal partner to take Golfsmith to the next stage of growth,” said Martin Hanaka, CEO of Golfsmith.

 

Upon the closing of the transaction, Martin Hanaka will assume the role of CEO of the combined company. Sue Gove, President, COO and CFO of Golfsmith will become the President and COO of the combined company and Ron Hornbaker will assume the role of EVP-Stores.

 

The boards of directors of both Golf Town and Golfsmith have approved the transaction; in Golfsmith’s case, following the approval and recommendation by a transaction committee of independent directors. Atlantic Equity Partners III, L.P. and certain officers of Golfsmith, holding collectively a majority of Golfsmith’s outstanding shares of common stock, have executed a written consent approving the transaction and the transaction is not subject to further stockholder approval.

 

In connection with the transaction, BMO Capital Markets and TD Securities Inc. are acting as financial advisors to Golf Town, and Lazard is acting as financial advisor to Golfsmith. Legal counsel is being provided by Weil, Gotshal & Manges LLP for Golf Town and White & Case LLP for Golfsmith.

 

Conference Call Information:

 

Golfsmith will host a conference call tomorrow, May 15th at 9 a.m. (eastern standard time) to discuss their first quarter 2012 financial results. The call will be simulcast over the Internet at https://investors.golfsmith.com . A replay will be available for 30 days following the call at the aforementioned website. Telephone replays can be accessed for one month following the call by dialing 877-870-5176 (U.S.) or 858-384-5517 (international) and entering pass code 5747275.

 

About Golf Town:

 

Golf Town is a 13-year-old specialty golf equipment, apparel and accessories retailer. The company is Canada’s largest golf retailer and has 54 stores throughout the country. Golf Town expanded into the US market in 2011 by opening 6 stores in the greater Boston area. Golf Town offers a superior selection of brand names as well as proprietary brands. Golf Town was acquired by OMERS Private Equity in September 2007. For further information visit: www.golftown.com .

 

About Golfsmith

 

Golfsmith International Holdings, Inc. GOLF 0.00% , has been in business for over 40 years and is a specialty retailer of golf equipment and related apparel and accessories. The company operates as an integrated multi-channel retailer, offering its customers the convenience of shopping in 85 retail locations across the United States, through its Internet site and from its assortment of catalogues. Golfsmith offers an extensive product selection that features premier branded merchandise, as well as its proprietary products, clubmaking components and pre-owned clubs. For further information visit: www.golfsmith.com .

 

About OMERS Private Equity Inc.

 

Operating under the OMERS Worldwide brand, OMERS Private Equity today manages the private equity activities of OMERS and has over $6.3 billion of investments under management. The group’s investment strategy includes the active ownership of businesses in North America and Europe. OMERS Private Equity is headquartered in Toronto, Canada, with offices in New York and London. For further information visit: www.omerspe.com .

 

About OMERS

 

OMERS is one of Canada’s largest pension funds with over $55 billion in net assets. It provides first-class pension administration and innovative products and services to 420,000 members. Approximately one in every 20 employees working in the province of Ontario is an OMERS member. Through the OMERS Worldwide brand, our team of investment professionals uses a direct drive, active management investment strategy to invest in public and private market assets, including publicly-traded equities, fixed-income, infrastructure, private equity and real estate.