SPORTMART SIGNS PACT TO MERGE WITH GART
DENVER — Sportmart Inc. signed an agreement to merge with Gart Sports Co., the holding company for Gart Bros. Sporting Goods Co.
Under the agreement, expected to close by yearend, Sportmart will be merged into Gart Bros., creating the second-largest full-line sporting goods retailer in the U.S., with 120 stores in 13 states.
Gart Sports Co. will be the surviving entity and is expected to report revenues of $700 million in its first year. Sportmart is expected to contribute about $500 million of that figure, said Mark Scott, president of Sportmart.
The merger is expected to enhance Sportmart’s commitment to women’s activewear, Scott said.
“Their belief in the women’s business is just as strong as ours. That will continue as we go forward,” Scott said.
The new company will rank behind The Sports Authority, with 174 stores and $1.7 billion revenues in 1996.
Gart shareholders will hold 72.5 percent of the combined company, of which Leonard Green & Partners, a Gart Sports affiliate, will hold 60 percent of the total shares outstanding. Sportmart holders will have 27.5 percent.
A majority of both Sportmart and Gart Sports shareholders have already agreed to vote in favor of the merger.
Sportmart stock fell 1 3/16 to 3 9/16 in over-the-counter trading Monday. Gart Sports is privately held.
Gart Sports chairman and chief executive officer Doug Morton will become chairman, president and ceo of the combined company, while Sportmart’s ceo, Andrew Hochberg, will serve as a consultant. Hochberg and his father, Larry Hochberg, chairman and founder of Sportmart, are expected to be elected to the board of Gart Sports following the merger.
Scott will continue as president of the Sportmart stores.
The transaction, which is subject to regulatory approval, is expected to close by the end of 1997.
Denver-based Gart Sports operates 61 sporting goods stores, while Sportmart, based in Wheeling, Ill., operates 59 stores.