Sportsman’s warehouse just announced that it has entered into agreements with DICK’S Sporting Goods to acquire 8 of the Field And Stream Store locations. These newly acquired stores will be operated as Sportsman’s Warehouse stores and they will be located in Pennsylvania (3 Stores), New York (2 Stores), North Carolina (2 Stores) and one store in Michigan.
The entirety of the buy-out totalled nearly $28 million dollars for assets and current inventory at the stores. The purchase is currently being funded through borrowings secured under Sportsman’s revolving credit facility. Sportsman’s intends to sublease the eight locations from DICK’s. Both parties intend to close on the deal by October 11th, although, closing is still subject to the customary closing conditions.
In a press release by Sportsman’s the current Chief Executive Officer, Jon Baker, announced his excitement for the purchase:
We are very pleased to announce this opportunistic expansion of our current 95 store base through the acquisition of these 8 Field & Stream locations. Each of these stores operate in strong markets, with well-established customer bases. We look forward to serving these communities with our continued strong commitment to provide outstanding gear and exceptional service to inspire outdoor memories.
Sportsman’s Warehouse STock Market Future
For those of you who may hold stock in the company, you need not be worried. If you exclude the non-recurring costs and non-cash purchase accounting adjustments, the transaction should have a neutral effect on your earnings per share for 2019 and you should see an increase in earnings per share for fiscal year 2020! Each of the acquired stores meets or exceeds the investment hurdle rates that Sportsman’s has established for themselves for the opening of any new store.
A good move or an ambitious Take over?
From a shooter’s perspective, I believe this to be a great move for the company. Sportsman’s Warehouse generally has all the reloading supplies I need and also carries a massive selection of guns, ammunition and hunting supplies. There has rarely been a time when they haven’t had the powder or primers that I need. With DICK’S ending gun sales in a good number of their stores, this acquisition may save Field and Stream stores from falling to the same fate.
Do you think this is a solid acquisition or will Sportsman’s Warehouse suffer because of this expansion? Be sure to let us know in the comments below.