Golf Galaxy Inc, the interactive golf superstore offering Everything for the Game, has signed an agreement to buy The GolfWorks, one of the golf industry's most complete sources for golf club components, clubmaking 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 approx. $4 million in cash; Golf Galaxy common stock valued at approx. $4.5 million; and warrants to purchase 150,000 shares of Golf Galaxy common stock, valued at approx. $1.5 million. In addition, it will assume approx. $5 million in debt from The GolfWorks.
The GolfWorks had fiscal 2005 net sales of approx. $24.5 million.
Golf Galaxy said it expects the transaction to be neutral to earnings per share in fiscal 2007 and accretive to earnings per share beginning in fiscal 2008.
Randy Zanatta, President and Chief Executive Officer of Golf Galaxy, said, "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."
"We believe this is a great opportunity to build on the success that The GolfWorks has achieved and grow both of our brands," he added.
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.
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