PITTSBURGH, Nov. 26 -- Dick's Sporting Goods, Inc. (NYSE: DKS) 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 Southern California markets. This acquisition provides the Company with an immediate presence and market share in Southern California. The passion with which Chick's Sporting Goods serves the core athlete and California lifestyle customers which include beach and skate markets via their assortment featuring products from authentic manufacturers, commitment to customer service and knowledgeable sales associates, along with Chick's community involvement compliments Dick's Sporting Goods strategy," said Edward W. Stack, Chairman and CEO of Dick's Sporting Goods.
"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.
Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as "may," "will," "expect," "anticipate," "believe," "guidance," "estimate," "intend," "predict," and "continue" or similar words. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks and uncertainties are more fully described in the Company's Annual Report on Amendment No. 1 to Form 10-K/A for the year ended February 3, 2007 as filed with the Securities and Exchange Commission on June 5, 2007. The Company disclaims any obligation and does not intend to update any forward-looking statements except as may be required by the securities laws.
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.
Dick's Sporting Goods, Inc. news releases are available at http://www.dickssportinggoods.com/ (click on the Investor Relations link at the top of the home page).