Canadian Tire to buy Forzani for $771 million
By S. John Tilak
TORONTO (Reuters) - Canadian Tire Corp said on Monday it would pay C$771 million ($798.5 million) to acquire Forzani Group Ltd, Canada's No.1 sporting goods retailer, in its biggest acquisition yet.
The friendly deal will give Canadian Tire, one of Canada's biggest and best-known retailers, a commanding share of the sporting goods market, a presence in Canadian malls and an avenue for reaching younger consumers.
"The time has come for our company to go on offense," said Stephen Wetmore, Canadian Tire's chief executive, referring to the retailer's decision to expand aggressively into sporting goods.
The acquisition comes as U.S. retailers look for growth opportunities north of the border and nearly four months after Target Corp, the No.2 U.S. discounter, said it would enter Canada.
Founded in 1973, Forzani operates more than 500 retail outlets across Canada, under the Sport Chek, Sports Experts Atmosphere and National Sport banners. It has annual revenue of about C$1.4 billion.
Canadian Tire will run Forzani as a separate business unit. The iconic Canadian Tire chain, founded in 1922, already carries sporting goods and also features automotive, gardening, housewares and hardware. It also owns the Mark's Work Wearhouse chain of more than 380 stores focusing on casual and work clothing.
With the addition of Forzani, the company will have more than 1,000 outlets carrying sporting goods.
Canadian Tire will pay C$26.50 per share in cash for the 96 percent of Forzani shares it does not already own. The price represents a premium of 50 percent over Friday's close. Continued...