Foot Locker to Buy Runners Point Group for $94M, Says Will Restart Buyback Plan in Q2
Foot Locker, Inc. (NYSE: FL), the New York-based specialty athletic retailer, announced today that it has signed a definitive agreement to acquire Runners Point Warenhandelsges. mbH ("RPG"), a specialty athletic store and online retailer based in Recklinghausen, Germany, for total cash consideration of 72 million euros (approximately $94 million). RPG is currently majority owned by the private equity firm HANNOVER Finanz. The Company's Chief Executive Office, Otto Hurler, and Chief Financial Officer, Harald Wittig own the balance of the Company. Both Mr. Hurler and Mr. Wittig, along with other members of senior management, will remain with the Company post-acquisition. The transaction is subject to review by merger control authorities in Germany.
RPG has a leading position in the German athletic retail market, operating more than 200 stores --- with its most prominent banners being Runners Point and Sidestep ^ --- as well as an online subsidiary, Tredex. RPG previously announced sales of 197 million euros ($254 million) for calendar year 2012. Most of the stores are in Germany, although there are also Runners Point and Sidestep stores in The Netherlands, Austria, and Switzerland. While most of the stores are owned and operated by RPG, 28 of the stores are operated by franchisees. The purchase price will be allocated between the sellers and RPG's primary creditors, delivering to Foot Locker, Inc. an entity which is substantially debt-free.
"We are excited to be adding Runners Point, a fast-growing, multi-format and multi-channel business, to our already-strong European operations," said Ken C. Hicks, Chairman and Chief Executive Officer of Foot Locker, Inc. "This acquisition will enhance our position in Germany, the strongest economy in Europe, and also provide us with additional banners to further diversify and expand our European business. We also intend to leverage Tredex's strong digital capabilities to accelerate growth in our own developing European e-commerce business."
"Our association with Foot Locker will significantly enhance the Runners Point team's ability to capitalize on the growth strategies we have been actively pursuing in recent years," said Mr. Hurler. "We look forward to working closely together to maximize the performance of our business as part of one of the world's leading specialty athletic retailers."
Because of the ongoing exclusive negotiations between the parties during Foot Locker, Inc.'s first fiscal quarter, the Company did not repurchase any shares during the period, but plans to reinitiate the program in the second quarter.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.