July 01--The owner of Eastern Mountain Sports and Bob's Stores says it has an agreement to buy Sport Chalet, Inc., a chain of West Coast sporting goods stores, in a deal whose value could reach close to $15 million.
Vestis Retail Group, based in Meriden, said Monday that the addition of Spot Chalet will make it one of the largest sporting goods retailers in the United States, with more than 150 stores and $800 million in sales.
In a statement, Craig L. Levra said Sport Chalet had spent much of the past year looking at ways to grow the company and settled on deal with Eastern Mountain Sports and Bob's Stores because of its East Coast connections.
"We are working creatively as we tighten controls for performance at the bottom line," said Levra, who will continue to run the company from its offices in Los Angeles. "We are ready for the next step, and we look forward to working with a company like Vestis that understands our customers, our market and our vendors, and has the financial resources to help us grow the business."
In the agreement, Vestis Retail has offered to buy Sport Chalet's 12.4 million shares for $1.20 each. The offer values shares about 7 percent higher than an average of what price they traded for since 2014 began. Vestis said that no Sport Chalet locations are expected to close as a result of the transactions, and all three companies will continue to operate under their existing brands.
Additionally, Philadelphia's Versa Capital Management, which advises funds that own Vestis Retail Group, will make a "substantial equity investment" into Vestis and its operations as well as a $180 million revolving credit line.
Mark Walsh, chief executive of Vestis Retail Group, said the acquisition improves the company's position in the active lifestyle and outdoor retail markets, while giving it more scale and geographically diversified operations.
"With the talent and resources that already exist within the Vestis family, we envision a multitude of programs that will leverage the knowledge, talent, and relationships of our three retail companies to the benefit of customers and vendors alike," Walsh said in a statement.
(c)2014 The Hartford Courant (Hartford, Conn.)
Visit The Hartford Courant (Hartford, Conn.) at www.courant.com
Distributed by MCT Information Services
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer