Wilson Sporting Goods has purchased the Athletic Training Equipment Company from Sport Supply Group for a cash consideration of $10.5 million. ATEC, which manufactures pitching machines and training equipment, posted $11 million in sales last year and were described as “highly profitable,” by Wilson.
According to Geoffrey P. Jurick, Sport Supply's CEO and president, the company is selling ATEC as a part of their strategy to “eliminate certain operations in order to reduce our debt and operating expenses in an effort to return SSG to profitability.”
The company has already been divesting itself of team dealer operations it acquired over the last five years. So far this year, Sport Supply Group has sold the Spaulding Athletic and Larry Black Sporting Goods units that were based in Arkansas, Oklahoma and Kansas, leaving only its Dallas, TX team dealer unit.
“In order to strengthen our balance sheet, we decided to renegotiate our bank indebtedness through the sale of ATEC ATEC became consistently profitable after we acquired the operation out of bankruptcy in 1997, SSG was able to realize a significant gain on this transaction,” said Jurick.
Wilsons parent company, Amer Group, is very optimistic about the acquisition, and happy to be adding another profitable business to their stable.
The company, which employs about 40 people, will be part of the Wilson Team Sports Company. ATEC president Gene Grant will report to Chris Considine, president of Wilson Team Sports.
SSPY shares jumped almost 28% for the week to close at $1.85 on Friday. AMER shares rose 2.1% for the week to close at 34.00 on the Helsinski exchange.
In related news, Amer Group has announced that it is getting out of the tobacco business. The company currently has about a 75% market share in Finlands tobacco market through an exclusive license to manufacture and sell Philip Morris cigarettes. The licensing agreement expires in 2005, and it cannot be shifted to another company without the consent of Philip Morris.
Sources close to the company say that the most likely options are either shutting down the companys cigarette factory in Tuusula, or selling it to another company. The company promises to make its decisions by late January. Amer CEO Roger Talermo said in a published report, “Now is a good time to give up tobacco.”
Not only is the economic climate ripe to drop this part of their business, but there is also the oxymoron of a sporting goods company producing tobacco.
>>> No confirmation yet if this means the end to pockets in Wilson Apparel designed to hold your smokes while you play tennis
