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biz.yahoo.com Friday April 9, 10:26 am Eastern Time Company Press Release SOURCE: Ajay Sports, Inc. Ajay Sports to Acquire Pro Golf of America; E-Commerce Sites to be Combined DELAVAN, Wisc., April 9 /PRNewswire/ -- Ajay Sports, Inc. (OTC Bulletin Board: AJAY - news) announced that it has signed an agreement to purchase all outstanding capital stock of Pro Golf of America, Inc., franchiser of Pro Golf® Discount retail golf stores. Pro Golf is the largest 'golf-only' store franchiser in the world, with 170 stores in the U.S., Canada and the Philippines. Highlights: * e-commerce to be a major focus of the combined companies, capitalizing on the strong brand name of Pro Golf® Discount with 170 franchised stores * Pro Golf is a sound and profitable business with outstanding franchising growth opportunities and strong strategic fit with Ajay's current business * More of Pro Golf's private label production can be shifted to Ajay, creating manufacturing and distribution efficiencies at Ajay facilities Pro Golf opened one of America's first 'off-course' retail golf stores in 1962, virtually inventing the retail and discount golf store concept. Their retail success led the company to begin franchising in 1975. Today, its franchised stores generate over $250 million in golf equipment and apparel sales through the off-course golf shop distribution channel each year. The stores offer a full line of golf products from major golf manufacturers, exclusive private label product lines, and specialized services including computer swing analysis and custom club fitting. Pro Golf collects initial franchise fees from each new store and ongoing monthly royalties from product sales. Pro Golf has recently launched an Internet website, www.progolf-discount.com, an online golf shopping mall targeting golf equipment purchasers in areas not served by a Pro Golf® Discount store, with a product selection similar to that available in its franchised stores. Over $5 billion is spent annually in the United States and over $10 billion is spent worldwide on golf equipment, and Pro Golf is well positioned for growth and dominance in this retail segment. Commenting on the acquisition, Ajay Sports Chairman and CEO Thomas W. Itin stated, ''There are three important reasons why this acquisition appeals to Ajay. First is the substantial opportunity in e-commerce for golf. Both companies have recently launched websites for retail golf equipment sales -- Ajay at www.usgolfshop.com, and Pro Golf at www.progolf-discount.com. Pro Golf has an online retailing business model that combines a full line of brand name products at discount prices, along with a store locator for in-market sales. Selected Ajay golf products, such as the recently licensed Gary Player branded products, could be promoted on this site to increase selling opportunities for Ajay. In addition, the online selling of the combined company's product lines could then be fulfilled from Ajay's distribution center in Delavan. As Ajay already does warehousing and fulfillment for its current customer base, this should considerably improve Ajay's efficiency and productivity. The back-end fulfillment by Ajay is a perfect complement to the brand name awareness of Pro Golf on the front-end, and makes for an excellent strategic fit and one that has tremendous opportunities for growth. E-commerce is planned to be a major area of focus for the combined companies in the future.'' Mr. Itin further commented, ''Second, Pro Golf is a sound and profitable business that we believe will continue to generate significant cash and have outstanding franchising growth opportunities for the future. Pro Golf® Discount is one of the oldest and best known names in the retail golf business, and we intend to capitalize on that excellent brand name in our expansion plans.'' Mr. Itin added, ''The third positive aspect of this acquisition for Ajay Sports is that it would provide an opportunity for new manufacturing business to Ajay's factories in Delavan, Wisconsin and Mexicali, Mexico. Pro Golf® Discount sells a considerable volume of private label bags and accessories that are manufactured for them by Ajay's Palm Springs Golf subsidiary and other outside suppliers. Once the acquisition is completed, Pro Golf expects to shift more of this production to the Ajay/Palm Springs manufacturing facilities and provide additional manufacturing capacity that Pro Golf could utilize as the private label volume grows in its current and future stores. Any manufacturing that is added at Ajay/Palm Springs could be accommodated with little or no infrastructure expense, and this could immediately improve our productivity and efficiency.'' Mr. Itin went on to say that Ajay will attempt to structure the transaction so as to preserve the substantial net operating loss carryforward that Ajay possesses, and that the transaction is subject to due diligence by Ajay, which is now underway. The transaction is expected to be financed through a combination of bank debt, mezzanine financing and additional equity, and Mr. Itin is now in the process of establishing this capital structure with a number of interested parties. Ajay Sports, Inc. manufactures and markets leisure living products, including Gary Player(TM), Gary Player Black Knight(TM) and Gary Player Signature(TM) golf bags, carts, accessories and gloves; Ajay(TM) and Spalding(TM) bags, gloves and accessories; Dilbert(TM), NFL(TM) and major college-licensed headcovers; Palm Springs Golf(TM) specialty golf clubs, bags and accessories; and In-Motion(TM) casual living furniture, for the United States and select foreign markets. The Company sells golf products through mass merchants, off-course pro shops, green grass golf shops, catalogs and sporting goods stores. The company also sells through its Internet websites, www.usgolfshop.com and www.leisurelifeinc.com. Forward-looking statements in this news release, if any, are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain important factors could cause results to differ materially from those anticipated by the statements, including the impact of changing economic or business conditions, the success of its efforts at Internet commerce, the impact of competition, the availability of financing, the success of products in the marketplace, other factors inherent in the industry and other factors discussed from time to time in reports filed by the company with the Securities and Exchange Commission. SOURCE: Ajay Sports, Inc. More Quotes and News: Ajay Sports Inc (OTC BB:AJAY - news) Related News Categories: internet, leisure/travel, sports | ||||||||||||
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