Europes sporting goods industry continued to consolidate last week as five retailers announced three deals aimed at extending their reach across the continent.
Sports Direct International Plc. of the United Kingdom agreed to acquire majority stakes in two leading retailers. It agreed to acquire a 51 percent stake in Eybl & Sports Experts AG (EAG) of Austria. The company owns Eybl, which operates 29 stores in Austria and one in Germany, and Sports Experts, which operates 26 shops in Austria and two in Germany. Eybl is marketed as Austria’s largest sports specialist and carries a large selection of ball and outdoor sporting goods. Sports Experts is focused on the value segment. EAG generated revenue of €323.8 million in the year ended Aug. 31, 2012. Sports Direct agreed to acquire the stake for €10.5 million in payment to the Eybl family and a pledge to invest €35.0 million in EASs subordinated debt. The parties have the right to buy each other out at certain EBITDA multiple until Dec. 31, 2019.
In a second deal, Sports Direct agreed to acquire a 60 percent stake in Sportland International Group (SIG) for an undisclosed price. SIG operates 80 stores in Estonia, Latvia and Lithuania, including the Sportland, Sportland Outlet, Timberland, ONeill, Nike and Nike Outlet retail chains in Estonia, Latvia and Lithuania. It is also a distributor for Nike.
In Northern Europe, meanwhile, two leading online retailers agreed to a deal that will create a company with revenues approaching $100 million. Bicycle and outdoor retailer Internetstores GmbH agreed to acquire Swedish outdoor retailer Addnature AB for about $34 million, or 1.3 times revenue. The deal calls for Addnatures three founders and main owners to re-invest the majority of their proceeds into the combined company, while smaller shareholders will be bought out. The acquisition is financed by a new capital injection from the EQT Expansion Capital II fund, which already owns a minority stake in Internetstores.
Internetstores plans to use Addnatures market presence, local know-how and customer base to expand its online bike sales in the Nordic region. Likewise, Addnature will be able to use Internetstores established market presence and resources in German-speaking Europe and its online marketing expertise to embark on an international expansion.
Founded in 2000, Addnature has two physical stores and projects sales will reach $27 million this year, with 70 percent coming from its online store and 95 percent occurring in Sweden. Internetstores, which was founded in Stuttgart in 2003 by Internet entrepreneur Marius Köhler, offers more than 5,000 outdoor and bicycle products online. The company, which claims to have a leading position in Germany and be gaining market share in Switzerland, Austria, France, Spain and the Benelux countries, expects sales to reach $90 million in 2013.
