Listed retailer and distributor Massmart has added yet more popular retail chains to its already wide array of brands, announcing the acquisition on Tuesday of a controlling stake in sports specialist Moresport for R403,8-million in cash.
Moresport owns Sportsmans Warehouse, Sport Shoe World and Outdoor Warehouse, which the company will be adding to its Massdiscounters division, containing the Game, Makro and Dion retail chains, which all sell similar sports equipment, clothing and outdoor accessories.
Massmart said it has acquired an 84,1% stake in Moresport, as well as the group’s shareholders’ loans, from Nedbank’s private equity division, Vestacor and Moresport management.
Management will retain the remaining 15,9% stake in the company, although Massmart has a call option and management a put option over these shares that can be triggered in equal amounts after the June 2007 and June 2008 financial years, respectively.
The deal is still subject to due diligence and regulatory approvals.
Commenting on the move on Tuesday, Massmart CEO Mark Lamberti said: “This transaction complies with our strategic and financial criteria. It is earnings-accretive and enables us to significantly increase our customer appeal, participation and expertise in clothing, footwear and equipment, in the sports and outdoor categories.”
For many years, Massmart has participated to a limited extent in the distribution of sports clothing and footwear, outdoor and camping equipment and accessories, and sports equipment, through its Makro, Game and Dion chains.
The CEO said the Moresport chains will retain their own branding, customer focus and profit responsibility under a proven management team committed to realising fully the potential of Moresport’s new ownership.
Massmart is currently evaluating various forms of funding that will most effectively meet its desired capital structure, anticipated net gearing levels and risk profile, the CEO said. — I-Net Bridge