Fanatics Inc. has reached an agreement to acquire Dreams Inc., the parent of FansEdge.com. The agreement calls for Fanatics to acquire all the shares of Dreams for $3.45 a share in cash. The $183 million figure includes assumption of $25 million in debt. The offer represents a premium of 32 percent over Dreams’ closing share price of $2.61 on Friday.
Dreams' board has already approved the deal and the deal is expected to close in the third quarter after a shareholder vote.
Dreams, Inc. is a vertically integrated sports memorabilia and licensed products firm. It's businesses include: Mounted Memories, Field of Dreams, FansEdge, Pro Sports Memorabilia, The Greene Organization, Stars Live 365, Unique Images and Malcolm Farley Art. In 2011, it had sales of $141.7 million.
Fanatics operates the footballfanatics.com and surffanatics.com websites. TeamFanShop (www.teamfanshop.com), Fanatics’ turnkey e-commerce
solution, powers exclusive official online shopping experiences for some
of the biggest names in sports, including over 60 Division I athletic
programs and conferences, NFL and NBA teams, and top sports media
properties. It was acquired by GSI Commerce in February 2011 but spunoff later that year after GSI was acquired by eBay. Fanatics' revenues reached approximately $300 million in 2010.
Dreams President and CEO Ross Tannenbaum, Chairman Sam Battistone and other shareholders who collectively own approximately 35 percent of the outstanding shares of Dreams have committed to vote in favor of the deal.
“Fanatics shares our focus on the customer, innovation, and growth,” Tannenbaum said. “This combination will enhance Dreams' ability to achieve its goals, while realizing a significant and immediate all-cash premium for our shareholders. I am confident this merger is the right decision for Dreams and our shareholders.”
Dr. Phillip Frost, Dreams' third largest shareholder, the chairman of Israel's Teva Pharmaceuticals and chairman and CEO of Miami's Opko Health, commented: “Ross and his executive team have built a terrific company and ultimately were able to deliver meaningful value to all of its shareholders.”
“Today is an exciting day for all sports fans,” said Fanatics' CEO Alan Trager. “We are bringing together two of the most passionate management teams in licensed sports products. The addition of Dreams will enable Fanatics to accelerate our investments in product assortment, mobile and e-commerce technology, and a regional fulfillment infrastructure to better serve our customers and our partners. Together, we will be much better positioned to deliver a superior customer experience.”
