ATLANTA — Outdoor lifestyle retailer Gander Mountain Company has acquired Overton’s, Inc., a Greenville, N.C.-based direct marketer of specialty water sports and related marine accessories, for approximately $70 million in cash from private equity firm Linsalata Capital Partners.
The purchase price includes the repayment of Overton’s existing indebtedness at closing, and the deal was financed through the issuance of $24 million in Gander Mountain common stock at a purchase price of $5.90 per share, a $40 million term loan from Bank of America and borrowings under the company’s revolving credit facility.
Overton’s, which will continue to operate under the Overton’s brand and as a wholly-owned subsidiary of Gander Mountain, had 2006 revenues of more than $90 million and has more than 15 million catalogs distributed annually. Its operations include a fulfillment center and call center offering available capacity to support new Gander Mountain Internet and catalog marketing opportunities.
“The acquisition of Overton’s enables Gander Mountain to greatly accelerate our strategy to be an integrated, multi-channel retailer featuring Internet, catalogs and retail stores,” said Mark Baker, president and CEO of Gander Mountain. “Overton’s is a unique opportunity for Gander Mountain, providing an excellent team, a proven platform and infrastructure, and the capacity to handle substantial additional volume with minimal incremental investment.”
He said the acquisition will also create national awareness for the Gander Mountain brand as it grows into new retail areas. “It also should provide better balance to Gander Mountain’s season sales profile with the majority of Overton’s sales in the first of the year and, and help us to improve our margins and lower our selling costs,” Baker said.
Also, Gander Mountain, which is based in St. Paul, Minn., reported a net loss of $5.1 million, or 25 cents per share, in its third quarter, ended Nov. 3. The loss compares with net income of $2 million, or 14 cents per share, in the year-ago quarter. Sales increased 5.3 percent to $259.5 million from $246.5 million, but comparable stores sales decreased 8.4 percent.
Baker attributed the “disappointing” results to warm weather across the Northeast, which affected the fall hunting season, and to soft consumer demand.
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