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Golf Galaxy Buying The GolfWorks
FEBRUARY 16, 2006 --
Golf Galaxy has signed an agreement to purchase The GolfWorks, a source for golf club components, club-making tools and supplies, and technical information. The acquisition is expected to close in early March.
The purchase price, subject to customary closing adjustments, consists of a combination of approximately $4 million in cash; Golf Galaxy common stock valued at approximately $4.5 million; and warrants to purchase 150,000 shares of Golf Galaxy common stock, valued at approximately $1.5 million. In addition, Golf Galaxy will assume approximately $5 million in debt from The GolfWorks. The GolfWorks had FY05 net sales of approximately $24.5 million. Golf Galaxy said it expects the transaction to be neutral to EPS in FY07 and accretive to EPS beginning in FY08.
"The acquisition of The GolfWorks will enhance the performance and productivity of our stores by adding new products and a new customer base, reinforcing our 'Everything for the Game' strategy. In addition, The GolfWorks' capabilities will help us grow our direct business," said Randy Zanatta, CEO of Golf Galaxy. "We believe this is a great opportunity to build on the success that The GolfWorks has achieved and grow both of our brands."
The GolfWorks operates a direct-to-consumer business through its catalogs and its ecommerce site, selling both proprietary components and brand name shafts and grips. Founded by Ralph Maltby in '76, The GolfWorks, based in Newark, OH, has been manufacturing and distributing golf clubs, machines, gauges, tools and supplies worldwide to golf club repair shops, golf professionals, manufacturers, custom club makers and hobbyists for 30 years.
In addition to its domestic operations, which include an assembly and distribution center, and customer contact center, The GolfWorks has an operating division in Ontario, Canada. The GolfWorks has approximately 100 full- and part-time employees, all of whom will be retained with the acquisition. Following the close of the acquisition, Maltby, COB, and Mark McCormick, CEO, will join Golf Galaxy's management team. The GolfWorks will operate as a wholly owned subsidiary.
"This is an exciting new chapter for The GolfWorks," said Maltby. "We look forward to sharing our technical expertise with the Golf Galaxy team, extending The GolfWorks brand to brick and mortar retail stores, and working together to develop additional product and service offerings for golfers of all skill levels."
Although several Golf Galaxy stores and GolfGalaxy.com currently offer The GolfWorks' assortment of tools, components, shafts and grips, following the acquisition, Golf Galaxy plans to offer a greater selection of these items both online and in its stores. Golf Galaxy plans to feature The GolfWorks store in a store concept in 29 of its stores by mid-May and in all of its stores by this fall.
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Categories
Sporting goods industry
Golf
Companies
Golf Galaxy
GolfWorks
Concepts
golf club
golf club components
customer contact
customary closing adjustments
custom club makers
People
Ralph Maltby
Randy Zanatta
Mark McCormick
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