Collegiate Pacific Announces Definitive Merger Agreement to Purchase Remaining Shares of Sport Supply Group, Inc.; Company to Pu
September 21 2006 - 9:30AM
Business Wire
Collegiate Pacific Inc. (AMEX:BOO) today announced the execution of
a definitive merger agreement to acquire the remaining shares of
Sport Supply Group, Inc. it does not currently own for
approximately $24 million in cash, or $8.80 per share, for each
issued and outstanding share of Sport Supply Group, Inc.'s common
stock, except for shares owned by Collegiate Pacific, or any of its
subsidiaries. The merger agreement has been approved by the board
of directors of SSPY, upon the recommendation of a special
committee of the SSPY board of directors. The special committee
received a fairness opinion that the transaction is fair to the
minority SSPY stockholders from a financial point of view. The
merger agreement is subject to, among other things, the approval of
the stockholders of SSPY and the obtaining of financing. Collegiate
Pacific, which controls 73.2% of SSPY's voting power, has agreed to
vote its shares of SSPY in favor of the merger at the SSPY
stockholders meeting. Collegiate expects to finance the merger
through borrowings under a new credit facility with Merrill Lynch
Business Financial Services. Commenting on the pending SSPY
transaction, Michael J. Blumenfeld, Chairman and CEO of Collegiate
Pacific, Inc., stated, "I am very pleased to announce the execution
of a definitive merger agreement to acquire the remaining shares of
SSPY we do not currently own for $8.80 per share or approximately
$24 million. This is an all cash transaction. Using cash versus
stock to complete this acquisition is a benefit we believe to all
parties involved as it speeds the time to closure - allowing for
potential synergy work once the companies are fully under common
ownership to begin during the slower winter months - while also
removing potential overhang and dilution from newly issued shares
had they been issued at these levels. Subject to the satisfaction
of all conditions, we anticipate closure of the transaction within
the next 60 to 90 days. Completion of this transaction allows, we
believe, for the full potential between Collegiate Pacific and
Sport Supply Group to be realized. We anticipate - with the hard
work and dedication of both Sport Supply Group and Collegiate
Pacific employees - the transaction will offer significant
accretion over the next 12-36 months as we work to accelerate top
line growth, combine our manufacturing and distribution assets, and
aggressively attack unnecessary costs throughout the system. "Once
the transaction is complete, and in keeping with my comments during
the past year, I do intend to retire sometime toward the end of the
calendar year. I will likely remain involved with the Company in a
consulting capacity subject to the requests of the board of
directors. Managerially, it is likely that current Collegiate
Pacific President, Adam Blumenfeld, will occupy the position of
Chief Executive Officer and current Sport Supply Group President
Terry Babilla will occupy the position of President and COO. This
too is subject to approval by Collegiate Pacific's board of
directors and we will formally announce our succession plans as
soon as those have become definitive. With the consummation of this
transaction, I believe we have assembled the strongest managerial
team and family of operating assets in team sports history to take
this business forward." This press release contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include statements relating to Collegiate Pacific's
anticipated financial performance, business prospects, new
developments and similar matters, and/or statements preceded by,
followed by or that include the words "believes," "could,"
"expects," "anticipates," "estimates," "intends," "plans" or
similar expressions. These forward-looking statements are based on
management's current expectations and assumptions, which are
inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict. Actual results may
differ materially from those suggested by the forward-looking
statements due to a variety of factors, including changes in
business, political, and economic conditions due to the threat of
future terrorist activity or otherwise, actions and initiatives by
current and potential competitors, the satisfaction of the closing
conditions to the merger with Sport Supply Group including the
receipt of financing on terms acceptable to Collegiate Pacific, and
certain other additional factors described in Collegiate Pacific's
filings with the Securities and Exchange Commission. Other unknown
or unpredictable factors also could have material adverse effects
on Collegiate Pacific's future results, performance or
achievements. In light of these risks, uncertainties, assumptions
and factors, the forward-looking events discussed in this press
release may not occur. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date stated, or if no date is stated, as of the date of this
press release. Collegiate Pacific is not under any obligation and
does not intend to make publicly available any update or other
revisions to any of the forward-looking statements contained in
this press release to reflect circumstances existing after the date
of this press release or to reflect the occurrence of future events
even if experience or future events make it clear that any expected
results expressed or implied by those forward-looking statements
will not be realized.
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