Collegiate Pacific (AMEX:BOO)
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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.