In a story that probably would have been front page news a decade ago, Russell Corporation has purchased the assets of Huffy Sports Company, the division of Huffy Corp. that is primarily known for its basketball backboard business, but also does about 20% of its estimated $70 million business in other categories, such as inflatables. RML bought the assets of the Sussex, WI operation for $30 million in cash and will also assume certain operating liabilities associated with the business. There was no word on the status of the 200 employees at the facility.
What now remains of the Huffy Corporation is the bicycle business as well as the action sports categories and the Tommy Armour golf business that were acquired in the original Gen-X deal. HUF has already sold off the Gen-X off-price business and the companys service arm. The company expects that all remaining operations will have been completely transitioned to Dayton, OH by the end of this week.
RML sees the acquisition as accretive in 2005, but will be a hit to the bottom line for the back half of 2004 to the tune of four to five cents per share.
>>> This business will merge nicely into Russells Spalding operation, but the need for the inflatables business is questionable…