RUSSELL AND SPALDING ANNOUNCE PURCHASE AGREEMENT
FOR SPALDING’S SPORTING GOODS BUSINESS
ATLANTA (April 17, 2003) --
Russell Corporation (NYSE: RML) today announced
that it has signed a purchase agreement to acquire
the brand names, inventory, contracts and related
assets of the sporting goods business of Spalding
Sports Worldwide, Inc. for $65 million. Spalding
is a leading producer and marketer of basketballs,
volleyballs, footballs and soccer balls under
the SPALDING brand name and of softballs under
the DUDLEY brand.
This agreement covers ownership of the SPALDING
and DUDLEY names for all products. It also includes
Sherrin, a brand of Australian rules football
equipment, and contracts with more than 60 licensees
around the world for apparel, shoes, sporting
goods and related products. Russell is not acquiring
the existing golf business that is sold under
different brand names.
Sales for the Spalding sporting goods business
in 2002 were $90 million, including royalties
from license agreements. Total wholesale revenue
for the SPALDING brand name, including licensed
products, is over $300 million annually.
Russell anticipates the transaction, which
is subject to clearance under the Hart-Scott-Rodino
Act, will be completed by the end of May. The
company expects the acquisition to be mildly
accretive to its earnings in 2003.
“This acquisition will expand Russell’s
position as an athletic company,” said
Jack Ward, chairman and CEO of Russell Corporation.
“SPALDING is one of the oldest, largest
and best known global sporting goods brands
and certainly fits into our strategic plan for
growth through our athletic heritage. Russell
and Spalding share a long history of providing
quality products to athletes ranging from the
pros to high school, college and recreational
teams across the country.”
Russell has hired Scott Creelman to serve as
president of the Spalding operation based on
the successful completion of the acquisition.
Creelman was with Spalding Sports Worldwide
for 26 years and has been a consultant in the
sporting goods industry since 2000.
Spalding was founded in 1876 by Hall of Fame
pitcher Albert G. Spalding and is the official
basketball supplier for the NBA and WNBA, the
official volleyball for the NCAA and American
Volleyball Association , and the official soccer
ball of the Major Indoor Soccer League.
Spalding’s innovative research and development
efforts have led to significant market share
gains due to the introduction of its Infusion
line of inflatable sports balls that feature
built-in MICRO-PUMP technology. This breakthrough
product innovation allows users to inflate the
product anytime, anywhere, thus eliminating
the need for a separate pump and needle. The
product was recognized by Popular Science magazine
as one of the top 100 innovations in 2001.
According to Spalding President and CEO Jim
Craigie, the sale of the sporting goods business
is consistent with Spalding’s strategic
direction to strengthen its balance sheet and
focus resources behind the core golf business.
“By reducing our debt and consolidating
our operations, we enhance our abilities to
drive growth behind our prestigious group of
golf brands including TOP-FLITE, BEN HOGAN and
STRATA,” said Craigie. “We are especially
pleased that Russell will continue to operate
the Spalding sporting goods business in the
Springfield, Mass. area and retain many of our
current employees.”
Russell plans to establish an office for the
operation in the Springfield-Chicopee area with
approximately 40 employees at that location.
The proposed acquisition continues Russell Corporation’s
expansion in the sports, outdoors and athletic
markets. Russell acquired Moving Comfort in
2002 and Bike Athletic Company earlier this
year.
Russell was advised by Lazard LLC and Spalding
was advised by UBS Warburg LLC.
ABOUT RUSSELL CORPORATION
Russell Corporation is a leading branded athletic,
activewear, and outdoor company with over a
century of success in marketing athletic uniforms,
apparel and accessories for a wide variety of
sports, outdoor and fitness activities. The
company’s brands include: Russell Athletic,
JERZEES, Mossy Oak, Cross Creek, Discus, Moving
Comfort and Bike. The company’s common
stock is listed on the New York Stock Exchange
under the symbol RML and its website address
is www.russellcorp.com
FORWARD LOOKING STATEMENT
This Press Release includes
certain forward-looking statements within the
meaning of the Private Securities Litigation
Reform Act of 1995. Some of these statements
can be identified by terms and phrases such
as “anticipate”, “believe”,
“intend”, “expect”,
“continue”, “could”,
“may”, “plan”, “project”,
“predict”, “will” and
similar expressions and include references to
assumptions that Russell believes are reasonable
and relate to its future prospects, developments
and business strategies. Factors that could
cause Russell’s actual results to differ
materially from those expressed or implied in
such forward-looking statements include risks
related to the Spalding sporting goods business
and Russell'’ overall acquisition strategy
and other risk factors listed in Russell'’
reports filed with the Securities and Exchange
commission from time to time. Russell undertakes
no obligation to revise the forward-looking
statements included in this Press Release to
reflect any future events or circumstances.
Russell’s actual results, performance
or achievements could differ materially from
the results expressed or implied by these forward-looking
statements.
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