Collegiate Pacific Inc. has entered a definitive merger agreement to acquire the remaining shares of Sport Supply Group, Inc. that it does not currently own for $8.80 per share, which will amount to approximately $24 million in cash. 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.”
