K2 announced that it has signed a letter of intent to acquire 100% of the stock of softball powerhouse Worth, Inc. The parties anticipate that the purchase price, which will not be disclosed, will be a combination of K2 common stock and cash, plus the assumption of debt.
For the year ended June 30, 2002, Worth generated total sales of $57.8 million, and K2 believes that the transaction will be accretive to its earnings per share in the first 12 months after closing.
The proposed transaction is subject to the negotiation and execution of a definitive agreement and other approvals and customary closing conditions.
“Worth adds significant product mix and knowledge to our Rawlings division,” said Richard J. Heckmann, chairman and chief executive officer. “They are a leader in metal softball bats while Rawlings has not been a significant player, and Worth manufactures their bats while Rawlings does not have that capability. The combination of Worth's softball business with the Rawlings softball operation will make us the market leader in balls, bats and gloves. Worth's lacrosse division (deBeer) gives us access to a fast growing team sport we have wanted to enter,” he said. “We believe this transaction is exactly in line with our strategy of combining leading and complimentary brands under K2 Sports.”
Robert Parish, chief executive officer of Worth, Inc. commented, “Worth is a dominant player in the sporting goods industry. We believe in K2's mission to bring together a portfolio of the strongest sporting goods brands, and joining K2 will have value-added benefits to our customers and opportunities for Worth employees. We are very pleased to become a part of the K2 organization, which we believe is defining the future of the sporting goods industry.”
