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Technology Stocks : Ashford.com Inc-(ASFD) -- Ignore unavailable to you. Want to Upgrade?

To: Texas77 who wrote (110)	9/15/2001 5:36:10 PM
From: Glenn Petersen	Respond to of 111

ASFD to be acquired by GPST: thestandard.com Global Sports to Buy Ashford.com for $14 Million By Miguel Helft Sep 14 2001 02:23 PM PDT The fast-growing company continues its expansion beyond the world of sporting goods through the acquisition of the luxury goods retailer. Global Sports, a fast growing company that runs e-commerce Web sites for an expanding stable of retailers, said Friday it agreed to acquire troubled luxury goods retailer Ashford.com for about $14 million in cash and stock. The deal further diversifies Global Sports, which began as an operator of Web sites for sporting goods retailers but has recently expanded to serve companies such as QVC and Kmart. "We think [luxury goods] is a good category online," Michael Rubin, CEO of Global Sports, said in an interview. "We expect to go out and bring multiple partners in the category." Rubin said he hoped to use Ashford's merchandising expertise and specialized fulfillment infrastructure to lure other luxury goods retailers much like the company has done with various sports companies, including Athlete's Foot, Gart Sports, Sports Authority and Sports Chalet. While not well known to consumers, King of Prussia, Penn.-based Global Sports is becoming one of the few e-commerce stars. By outsourcing its e-commerce infrastructure to other retailers, the company has built a powerful business model and is expected to be profitable soon. Global Sports on Friday revised its revenues and earnings projections upwards, and now says it expects this year's revenues to exceed $200 million, higher than the $185 million expected by analysts. The company expects to report a pro-forma operating profit of more than $11 million, about $1 million higher than analysts' estimates. Shares of Global Sports have surged over the past 12 months, from a low of $2.38 to $16.51 on Monday. They reached a 52-week high of $19.88 in mid-August. Global Sports is now on a collision course with Amazon.com, which is increasingly dependent on revenues from alliances with traditional retailers to whom it provides e-commerce services. Just this week, Amazon signed a deal to run certain Web sites for Kmart rival Target. The No. 1 online retailer already has alliances with Borders Group and Toys "R" Us, among others. The Target alliance, a significant partnership for Amazon, got little attention, as it was announced Tuesday, just hours before the tragic attacks on the World Trade Center and Pentagon. Amazon, which was an investor in Ashford, will receive about $1 million and will end up owning about 16,000 shares of Global Sports stock once the transaction is complete, Rubin said. Under the terms of the deal, Global Sports expects to issue approximately 430,000 shares of common stock and pay approximately $7.1 million of cash in exchange for all of the outstanding shares of Ashford.com. Each Ashford share will be exchanged for 0.0076 of a share of Global Sports common stock and 12.5 cents in cash. Based on the closing stock price of Global Sports on Sept. 10, 2001, the transaction is valued at approximately $14.2 million. The acquisition represents about a 57 percent premium over Ashford closing price of 17 cents or total market value of $9 billion on Sept. 10. But Global Sports says the price was a good one, given that Ashford has reported a tangible net worth of $27.9 million as of June 30, including about $8.6 million in cash and accounts receivable and some $18.4 million in inventory. The transaction will be accounted for as a purchase and is expected to close later this year or early next year, Global Sports said.