Sports Direct International Unveils "Major International Expansion"
LONDON -- Sports Direct this morning announced that it has entered into separate agreements to acquire majority stakes in two leading European sporting-goods retailers.
The first is a 51% equity stake in Sports Eybl & Sports Experts AG, which is the leading sporting-goods retailer in Austria with about 25% of market share and is a family owned company with 80 years of history under its belt.
Sports Direct's acquisition is valued at 10.5 million euros payable to current EAG shareholders, with 30 million euros in subordinated debt also due to be invested in EAG. The agreement also allows Sports Direct the right to acquire the remaining shares in EAG from the Eybl Family for 15.5 million euros for five years following completion, while the Eybl Family also has the right to sell its remaining shares in EAG to Sports Direct for 5 million euros over the period.
The second agreement that Sports Direct announced this morning was a 60% equity stake purchase of Sportland International Group, the largest sporting-goods retailer in the Baltic region. SIG operates the Sportland, Sportland Outlet, Timberland, O'Neill, Nike, and Nike Outlet retail chains in Estonia, Latvia, and Lithuania.
Dave Forsey, Chief executive of Sports Direct International, commented:
The strategic investments announced today in Austria and the Baltic region represent a continuation of our previously stated European expansion plans. Expected benefits from these investments include increased scale for our international business, growing international awareness of our Group Brands and additional expertise in specialist product categories such as winter sports. We are delighted to be working with strong local partners such as the Eybl Family, Are Altraja and Anti Kalle and have every confidence in their ability to grow their businesses in Austria and the Baltics.
Shares in Sports Direct fell marginally on the news, down 1.4% as of 9 a.m. EDT. But this still represents a gain of more than 50% from a year ago, continuing its success following the "Olympic effect" of last summer.
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