Sport Supply Group, Inc. (NASDAQ: RBI) (“Sport Supply Group”),
the nation’s leading marketer, manufacturer and distributor of
sporting goods and branded team uniforms to the institutional and
team sports market, today announced that it has entered into a
definitive merger agreement to be acquired by an affiliate of ONCAP
Management Partners, L.P. (“ONCAP”), the mid-market private equity
business of Onex Corporation (“Onex”).
Under the terms of the merger agreement, all of the outstanding
shares of common stock of Sport Supply Group, other than those held
by certain participating stockholders, as discussed immediately
below, will be acquired for $13.55 per share in cash. CBT Holdings,
LLC, an affiliate of Andell Holdings (“CBT”), which beneficially
owns approximately 16% of Sport Supply Group’s outstanding common
stock, and certain members of Sport Supply Group’s management team,
have entered into agreements with ONCAP to exchange their Sport
Supply Group common stock and options, as applicable, for equity of
the purchaser entity. Carlson Capital, L.P., which beneficially
owns approximately 22% of Sport Supply Group’s outstanding common
stock, and CBT, have each entered into a voting agreement with
ONCAP, and have each agreed to vote their shares in favor of the
adoption of the merger agreement.
The merger agreement was negotiated on behalf of Sport Supply
Group by a special committee of Sport Supply Group’s board of
directors composed entirely of independent directors, with the
assistance of outside financial and legal advisors.
The board of directors of Sport Supply Group, on the unanimous
recommendation of the independent special committee, approved the
merger agreement and recommends that Sport Supply Group’s
stockholders adopt the merger agreement.
In accordance with the merger agreement, the special committee
of independent directors is entitled to solicit superior proposals
from third parties for a period of 30 days after today (which
period can be extended for an additional 15 days for parties
meeting certain additional requirements). However, there is no
assurance that the solicitation of superior proposals will result
in any proposal or an alternative transaction. Furthermore, if
Sport Supply Group’s board or its special committee, as applicable,
terminates the merger agreement as a result of accepting a superior
proposal, which will also terminate the voting agreement, then
Sport Supply Group is obligated to pay ONCAP a termination fee of
either $3,000,000 or $6,000,000, depending primarily on whether the
proposal was received during the “go-shop” period.
The transaction is subject to the approval of the holders of a
majority of the outstanding shares of common stock of Sport Supply
Group. The transaction is not subject to any financing condition;
however, ONCAP has the unilateral option to terminate the merger
agreement by paying to Sport Supply Group a termination fee of
either $6,000,000 or $10,000,000, depending on whether
financing is available to ONCAP. The transaction is expected to
close in the second or third quarter of this year.
Houlihan Lokey Howard & Zukin Capital, Inc. is acting as
financial advisor to the special committee in connection with the
proposed merger.
O’Melveny & Myers LLP is acting as legal counsel to
ONCAP.
Vinson & Elkins L.L.P. is acting as legal counsel to Sport
Supply Group.
About Sport Supply Group
Sport Supply Group Inc. is the nation’s leading marketer,
manufacturer and distributor of sporting goods and branded team
uniforms to the institutional and team sports market. Sport Supply
Group markets via 3 million direct catalogs, a 40-person telesales
team, more than 200 direct sales professionals, 60 Platinum
Resellers and a family of company-controlled websites.
About ONCAP
ONCAP, in partnership with operating company management teams,
invests in and builds shareholder value in North American small and
mid-size companies that are leaders in their defined market niche
and possess meaningful acquisition and organic growth potential.
For more information on ONCAP, please visit www.oncap.com.
ONCAP is the mid-market private equity business of Onex, one of
North America’s oldest and most successful investment firms
committed to acquiring and building high-quality businesses in
partnership with talented management teams. Onex manages investment
platforms focused on private equity, real estate and credit
securities. Over 25 years, Onex has completed more than 260
acquisitions and generated a 29 per cent compound annual return on
invested capital. In total, Onex manages approximately $12 billion.
For more information on Onex, please visit www.onex.com.
About Andell Holdings
Andell Holdings is a Los Angeles-based private investment firm
and family office with global business and investment interests.
Founded in 1998, Andell’s current activities are divided between
investments in private companies, core holdings in publicly-traded
companies, and partnerships with best-in-class investment
managers.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. All forward-looking statements, by their nature, are
inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict. The forward-looking
statements include, without limitation, statements relating to the
benefits of the proposed transaction, statements relating to future
performance of Sport Supply Group, statements relating to the
completion of the proposed transaction, and other statements
containing words such as “may,” “could,” “should,” “would,”
“believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,”
“target,” “goal,” and similar expressions or statements of current
expectation, assumption or opinion. There are a number of risks and
uncertainties that could cause actual results to differ materially
from these forward-looking statements, including the following: (1)
Sport Supply Group may be unable to obtain stockholder approval as
required for the transaction; (2) conditions to the closing of the
transaction may not be satisfied; (3) the transaction may involve
unexpected costs, liabilities or delays; (4) the business of Sport
Supply Group may suffer as a result of uncertainty surrounding the
transaction; (5) Sport Supply Group may be adversely affected by
other economic, business, and/or competitive factors; (6)
legislative developments; (7) changes in tax and other laws; (8)
the occurrence of any event, change or other circumstances that
could give rise to the termination of the merger agreement, (9) the
failure to obtain the necessary debt financing arrangements set
forth in commitment letters received in connection with the
transaction, and (10) other risks to consummation of the
transaction, including the risk that the transaction will not be
consummated within the expected time period or at all. Additional
factors that may affect the future results of Sport Supply Group
are set forth in its filings with the Securities and Exchange
Commission, including its recent filings on Forms 10-K, 10-Q and
8-K, including, but not limited to, those described in Sport Supply
Group’s Form 10-K for the fiscal year ended June 30, 2009 and Form
10-Q for the fiscal quarter ended December 31, 2009.
In light of these risks, uncertainties, assumptions and factors,
the forward-looking events discussed in this press release may not
occur. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date stated,
or if no date is stated, as of the date of this press release.
Sport Supply Group is not under any obligation and does not intend
to make publicly available any update or other revisions to any of
the forward-looking statements contained in this press release to
reflect circumstances existing after the date of this press release
or to reflect the occurrence of future events even if experience or
future events make it clear that any expected results expressed or
implied by those forward-looking statements will not be
realized.
Additional Information and Where to Find It
In connection with the proposed transaction, Sport Supply Group
will file a proxy statement and other materials with the SEC. WE
URGE INVESTORS TO READ THE PROXY STATEMENT AND THESE OTHER
MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT SPORT SUPPLY GROUP AND THE
PROPOSED TRANSACTION. Investors may obtain free copies of the proxy
statement (when available) as well as other filed documents
containing information about Sport Supply Group at http://www.sec.gov, the SEC’s free
internet site. Free copies of Sport Supply Group’s SEC filings
including the proxy statement (when available) are also available
on Sport Supply Group’s internet site at
http://www.sportsupplygroup.com/ under “Investors/SEC Filings.”
Sport Supply Group and its executive officers and directors may
be deemed, under SEC rules, to be participants in the solicitation
of proxies from Sport Supply Group’s stockholders with respect to
the proposed transaction. Information regarding the officers and
directors of Sport Supply Group is included in the definitive proxy
statement filed with the SEC on October 7, 2009 with respect to
Sport Supply Group’s fiscal 2010 annual meeting of stockholders.
More detailed information regarding the identity of the potential
participants, and their direct or indirect interests, by security
holdings or otherwise, will be set forth in the proxy statement and
other materials to be filed with SEC in connection with the
proposed transaction.
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