Collegiate Pacific has signed a letter of intent to acquire Tomark Inc., a 20 year old Corona, Ca. company engaged in the design, manufacturing and distribution of baseball and other sports equipment. Terms of the transaction were not disclosed. Closing is expected to occur in January 2004. The proposed transaction is subject customary closing conditions, including due diligence and the execution of a definitive agreement between Tomark and Collegiate Pacific.
“We are extremely pleased to have reached terms with one of the west coast's largest and most successful makers and national distributors of sports equipment,” said Michael J. Blumenfeld, Collegiate Pacific's Chief Executive Officer. “The combination of the two companies will create one of the largest institutional suppliers of baseball equipment in the United States. Like Collegiate Pacific, Tomark receives the majority of its orders in response to the national distribution of catalogs and also operates a unique field sales/installation team for the California markets.
“We intend to retain existing Tomark management and headquarters in California and use our capital and marketing resources to enhance their expansion. Our operating goal will be to expand Tomark's national presence as we expand their product line with the infusion of Collegiate Pacific's 3,200 products. It will also include expansion into the markets of adult softball and little league baseball. Tomark has a customer base of approximately 40,000 accounts which will compliment Collegiate Pacific's customer base of about 35,000 customers.”
Mr. Blumenfeld continued, “We are equally excited about adding a seasoned management team and staff to Collegiate Pacific. Mark Harpin and Tom White have a proven track record in the design, manufacturing and distribution of sports equipment dating back to 1980 and will make valuable contributions to our growth.
“We believe the successful closure of this transaction, assuming a closing date in January 2004, will add approximately $5.5 million in revenue to the remaining 6 months of FY2004 and an estimated $700,000 in operating income. We expect that the contributions for FY 2005 (commencing July 1, 2004) would materially exceed these numbers.
“As mentioned in previous reports, it remains our goal to double our revenue and earnings run rate during fiscal 2004 and Tomark is a step in that direction. We continue to review a number of acquisition targets that meet our criteria.”
