Russell Corporation announced Thursday that it has signed a purchase agreement to acquire the brand names, inventory, contracts and related assets of the sporting goods business of Spalding Sports Worldwide, Inc. for $65 million. Spalding is a leading producer and marketer of basketballs, volleyballs, footballs and soccer balls under the SPALDING brand name and of softballs under the DUDLEY brand.
This agreement covers ownership of the SPALDING and DUDLEY names for all products. It also includes Sherrin, a brand of Australian rules football equipment, and contracts with more than 60 licensees around the world for apparel, shoes, sporting goods and related products. Russell is not acquiring the existing golf business that is sold under different brand names.
Sales for the Spalding sporting goods business in 2002 were $90 million, including royalties from license agreements. Total wholesale revenue for the SPALDING brand name, including licensed products, is over $300 million annually.
Russell anticipates the transaction, which is subject to clearance under the Hart-Scott-Rodino Act, will be completed by the end of May. The company expects the acquisition to be mildly accretive to its earnings in 2003.
“This acquisition will expand Russell’s position as an athletic company,” said Jack Ward, chairman and CEO of Russell Corporation. “SPALDING is one of the oldest, largest and best known global sporting goods brands and certainly fits into our strategic plan for growth through our athletic heritage. Russell and Spalding share a long history of providing quality products to athletes ranging from the pros to high school, college and recreational teams across the country.”
Russell has hired Scott Creelman to serve as president of the Spalding operation based on the successful completion of the acquisition. Creelman was with Spalding Sports Worldwide for 26 years and has been a consultant in the sporting goods industry since 2000.
Spalding was founded in 1876 by Hall of Fame pitcher Albert G. Spalding and is the official basketball supplier for the NBA and WNBA, the official volleyball for the NCAA and American Volleyball Association, and the official soccer ball of the Major Indoor Soccer League.
Spalding’s innovative research and development efforts have led to significant market share gains due to the introduction of its Infusion line of inflatable sports balls that feature built-in MICRO-PUMP technology. This breakthrough product innovation allows users to inflate the product anytime, anywhere, thus eliminating the need for a separate pump and needle. The product was recognized by Popular Science magazine as one of the top 100 innovations in 2001.
According to Spalding President and CEO Jim Craigie, the sale of the sporting goods business is consistent with Spalding’s strategic direction to strengthen its balance sheet and focus resources behind the core golf business.
“By reducing our debt and consolidating our operations, we enhance our abilities to drive growth behind our prestigious group of golf brands including TOP-FLITE, BEN HOGAN and STRATA,” said Craigie. “We are especially pleased that Russell will continue to operate the Spalding sporting goods business in the Springfield, Mass., area and retain many of our current employees.”
Russell plans to establish an office for the operation in the Springfield- Chicopee area with approximately 40 employees at that location.
The proposed acquisition continues Russell Corporation’s expansion in the sports, outdoors and athletic markets. Russell acquired Moving Comfort in 2002 and Bike Athletic Company earlier this year.
Russell was advised by Lazard LLC and Spalding was advised by UBS Warburg LLC.
