GSPT NEWS!! SOFTBANK Corp. to Acquire 30% of Global Sports for $80 Million
BUSINESS WIRE - June 11, 1999 07:18
KING OF PRUSSIA, Pa., Jun 11, 1999 (BUSINESS WIRE via COMTEX) -- Global Sports to Focus Exclusively On E-commerce
Engages Deutsche Banc Alex. Brown to Divest Non-internet Assets
GLOBAL SPORTS, INC. (NASDAQ: GSPT) today announced a definitive strategic investment agreement whereby SOFTBANK Corp., will acquire an approximate 30% interest in the company on a diluted basis, for $80 million.
Global Sports, Inc. also announced that going forward it will focus exclusively on its e-Commerce business, Global Sports Interactive ("GSI"), and that it has engaged Deutsche Banc Alex. Brown to divest its non-Internet assets, including the Branded Division, consisting of Ryka and Yukon, and the Off Price & Action Sports Division. With the proceeds from the SOFTBANK's agreement, Global Sports intends to accelerate investment spending in GSI, significantly furthering its pursuit of becoming the leading e-Commerce company in the sporting goods category.
Last month, Global Sports, Inc. announced the formation of Global Sports Interactive, a breakthrough e-Commerce company with long-term exclusive agreements to operate the e-Commerce businesses for leading sporting goods retailers with combined annual sales of more than $3.0 billion. Currently, GSI has an e-Commerce partnership agreement with The Sports Authority and e-Commerce contracts with The Athlete's Foot, Sport Chalet, MC Sports, Sports & Recreation and one other retailer with annual sales in excess of $200 million. The sales results for the Sports Authority partnership as well as over 90% of the online sales for GSI's other five partners will be included in the consolidated financial statements of Global Sports, Inc. GSI expects to leverage the well-known brand names, substantial existing marketing visibility and established customer bases of these retailers to efficiently drive consumer traffic to its Web sites. By building a single best-of-breed organization and technology platform to run multiple e-Commerce sporting goods businesses, GSI is positioned to realize significant economies of scale, which could be further enhanced as the company seeks to expand its initial client base. GSI's plan to accelerate investment spending will include stepped up incremental marketing efforts, an aggressive content acquisition plan and a more rapid rollout of international operations.
Masayoshi Son, President and CEO of SOFTBANK Corp., said, "Global Sports Interactive embodies everything that is necessary for success on the Internet, including a brilliant business model, strong entrepreneurial management and a focus on a wide open opportunity. Our agreement with Global Sports, which represents one of the larger investments by SOFTBANK in an e-Commerce company, willprovide financial support that will assist it to build its business and realize on its vision. We believe that the $150 billion worldwide sporting goods industry has enormous untapped potential for e-Commerce and that Global Sports, through its partnerships with six leading retailers is well positioned to lead thecategory."
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