Canadian retailer Golf Town plans to buy Golfsmith
May 15, 2012 04:55 PM
Canadian multichannel retailer Golf Town is acquiring Golfsmith International Holdings Inc., the companies have announced. Golf Town is a specialty golf retailer based in Canada, where it operates more than 50 stores and an e-commerce site. Golfsmith, No. 209 in Internet Retailer’s Top 500 Guide, sells online at Golfsmith.com, through 78 Golfsmith stores and a catalog.
Golf Town began breaking into the U.S. market last year. It operates six stores in the Boston area. The companies say the deal will create the world’s largest specialty golf retailer. The purchase is subject to regulatory approval but is expected to close in the third quarter. The firm that owns Golf Town, Omers Private Equity, would not confirm reports that the deal is worth nearly $97 million.
"Golfsmith is a company that we have admired for years,” says Don Morrison, senior managing director of Omers Private Equity. “This transaction will give us a formidable footprint in North America and will also provide a strong platform for future growth."
Golfsmith CEO Martin Hanaka will be CEO of the combined companies; it was unclear if both companies would operate under a single name. Sue Grove, who is president, chief operating officer and chief financial officer of Golfsmith, will become president and chief operating officer of the combined companies. Ron Hornbaker, currently the interim CEO of Golf Town, will become executive vice president of stores.
“We hold Golf Town in the highest regard and believe them to be an ideal partner to take Golfsmith to the next stage of growth," Hanaka says. Internet Retailer estimates Golfsmith generated $78.3 million in web sales last year.
Today, Golfsmith reported that net revenue for the first quarter ended March 31 was $90.5 million, up 11% from $81.5 million for the same period last year. The retailer’s net loss stood at $3.6 million in the first quarter, compared with a $3.1 million loss for the same period last year.