With $50 million in cash received during its recent note placement burning a hole in his pocket, Collegiate Pacific CEO Michael Blumenfeld made another move late last week, signing a letter of intent to acquire team sports distributor Salkeld and Sons Inc. The company primarily services the Chicago area.
Blumenfeld had earlier said that interest on the notes would cost the company about four cents a share each quarter until the funds are deployed. Once invested, the notes will help push BOO to $215 million in annual sales and EPS of 90 cents to one dollar.
The current guidance sees 2005 sales in the $104 million to $107 million range with net income ranging from $4.0 million to $4.5 million, or diluted EPS of 40 cents to 42 cents. Sales for 2006, assuming no further acquisitions, will range between $127 million and $130 million and net income is seen in the range of $5.2 million to $5.8 million, or 50 cents to 56 cents per diluted share. The guidance was given before the Salkeld deal was announced.
Salkeld and Sons employs 14 full-time road sales professionals and has annual sales in excess of $7,000,000. Closing, subject to satisfactory completion of due diligence and audit, is anticipated in about 90 days. Terms of the transaction were not disclosed, but Blumenfeld said that Al Messier and Dan Salkeld, the companys founder, will stay on board with Collegiate Pacific as sales managers.
