Gander Mountain Acquires Overton’s Inc…

December 10, 2007
SGB Update

Gander Mountain Inc. paid $70 million to acquire Overton's, Inc. Headquartered in Greenville, N.C., Overton's distributes more than 15 million catalogs annually and operates a fulfillment center and call center that will be helpful to Gander Mountain’s fast track plans to beef up its Internet offerings and re-launch a catalogue at a time of declining comp store sales.


“Overton’s is a unique opportunity for Gander Mountain, providing an excellent management team, a proven platform and infrastructure and the capacity to handle substantial additional volume with minimal incremental investment,” said Gander Mountain CEO Mark Baker.


Overton, which sells about 15,000 SKUs including its own branded products, will operate as a wholly-owned subsidiary of Gander Mountain. As part of the deal, Overton’s will be restricted from selling hunting products until March of '09.


Overton’s has revenues in excess of $90 million, earnings before income taxes, depreciation and amortization of approximately $8 million and is expected to contribute to Gander Mountain’s earnings in fiscal 2008, mostly in the first and second quarter. CFO Bob Vold said Overton’s gross margins are nearly 43%, or about 60% higher than Gander Mountain’s.


Gander Mountain bought Overton’s from Linsalata Capital Partners, a private equity firm in Cleveland. It financed the deal using $24 million in Gander Mountain stock purchased from company officers, $40 million borrowed under a four-year secured loan and $6 million from Gander’s existing line of credit.

Gander Mountain Acquires Overton’s, Inc.

December 6, 2007
SGB Update

Gander Mountain Company has acquired Overton's, Inc., an Internet and catalog marketing company targeting recreational boaters, from Linsalata Capital Partners, a Cleveland-based private equity firm. With 2006 revenues in excess of $90 million and over 15 million catalogs distributed annually, Overton's is an established Internet and catalog marketer. Headquartered in Greenville, N.C., Overton's operations include a fulfillment center and call center offering available capacity to support new Gander Mountain Internet and catalog marketing opportunities.

The purchase price for the acquisition was approximately $70 million in cash which included the repayment of Overton's existing indebtedness at closing. The purchase price was financed through the issuance of $24 million in Gander Mountain common stock at a purchase price of $5.90 per share, a $40 million term loan from Bank of America and borrowings under the company's revolving credit facility. The common stock was purchased by GRATCO LLC, an affiliate of David Pratt, Gander Mountain's chairman, and Holiday Stationstores, Inc., which is an affiliate of both Ronald Erickson, Gander Mountain's vice chairman, and Gerald Erickson, a director of the company.

“The acquisition of Overton's enables Gander Mountain to greatly accelerate our strategy to be an integrated, multi-channel retailer featuring Internet, catalogs and retail stores,” said Mark Baker, Gander Mountain president and CEO. “Overton's is a unique opportunity for Gander Mountain, providing an excellent management team, a proven platform and infrastructure, and the capacity to handle substantial additional volume with minimal incremental investment.”

“Gander Mountain was the first major catalog company in our industry,” Baker continued. “Moving back into the catalog and Internet marketing arena will leverage our retail network of 115 stores across 23 states, and create national awareness for our brand as we grow into new retail areas. It also should provide better balance to our seasonal sales profile with the majority of Overton's sales in the first half of the year, and help us to improve our margins and lower our selling costs.”

Mark Metcalfe, CEO of Overton's, said, “The entire Overton's team is tremendously excited by the opportunities this new ownership brings. We believe we can significantly contribute to the growth of Gander Mountain's Internet and catalog efforts, as well as increase the distribution of Overton's catalogs and drive sales of Overton's products in Gander Mountain's retail stores.”

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