Russell Corporation (NYSE:RML) has 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.
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 and has hired Scott Creelman to serve as president of the Spalding operation. 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.
Spalding president and CEO, Jim Craigie, says that 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,” he said.
For the time being, Spalding Sports UK will continue to market and distribute basketball and football products in the UK. “The sale has effectively no impact on the UK at this time”, states Scott Lucas, managing director, Spalding Sports UK. “The UK company will continue to market, sell and distribute sporting goods under the Spalding brand name and look forward to working with Russell to continue the growth of the brand.”
Spalding Sports UK, 16 Trafalgar Way, Bar Hill, Cambridge CB3 8SQ
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