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Golf Galaxy completes The GolfWorks acquisition

17 Mar '06

2 min read

Golf specialty retailer Golf Galaxy Inc has completed its acquisition of The GolfWorks(R), one of the golf industry's most complete sources for golf club components, clubmaking tools and supplies, and technical information.

The purchase price, excluding direct costs of the acquisition, consisted of a combination of $3.7 million in cash; 250,862 shares of Golf Galaxy common stock valued at $4.8 million based on the average closing price of Golf Galaxy's common stock on the NASDAQ Global Market during a five-day trading period beginning three trading days prior to the announcement of the acquisition on Feb. 15; and warrants to purchase 150,000 shares of Golf Galaxy common stock with a fair value of $1.4 million, determined using the Black-Scholes option pricing model.

In addition, Golf Galaxy assumed $5.4 million in debt from The GolfWorks.

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. The GolfWorks had fiscal 2005 net sales of $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, pending the final purchase price allocation.

Golf Galaxy Inc, based in Eden Prairie, Minn., owns and operates golf specialty retail stores. It currently operates 52 stores in 23 states and an ecommerce website.

The company's Everything for the Game(R) merchandising strategy offers a comprehensive selection of competitively priced brand name golf equipment, accessories, apparel, golf services, and golf instruction by on-staff certified PGA professionals in a unique interactive store environment.

Golf Galaxy Inc

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