Canadian Tire Reaches Deal To Acquire Sportswear Retailer The Forzani Group
Retailer Canadian Tire yesterday announced that it has reached a deal to acquire The Forzani Group, Canada's "largest sportswear retailer," for C$771M, or C$26.50 a share, according to Dana Flavelle of the TORONTO STAR. If completed, the deal "would create a chain of 1,000 sporting good stores, including Forzani's various brands and Canadian Tire's same-name stores." Canadian Tire said that Forzani "would continue to operate its own stores under its own brands," which include Sport Mart, National Sports and others. Canadian Tire execs said that there is "very little overlap between the two retailers." More than 70% of Forzani's sales are "athletic clothing and footwear, with the balance in sporting goods that complement Canadian Tire's assortment." The companies said that the agreement is "conditional on two-thirds of Forzani's shareholders agreeing to the purchase and is also subject to the approval of the federal Competition Bureau" (TORONTO STAR, 5/10). Sources said that the deal was "partly motivated by the prospect of greater competition from U.S. retailers -- some of whom, like Target Corp., have already announced their intention to open Canadian stores, while others, such as Dick's Sporting Goods Inc., are said to be considering it." The GLOBE & MAIL's Marina Strauss reports Canadian Tire "will bring back Michael Medline, one of its top executives, who left the company last fall, to spearhead the integration of Forzani into the company" (GLOBE & MAIL, 5/10). Forzani brands include Sport Chek, Sport Mart, Atmosphere, National Sports, Athletes World and Hockey Experts. The company's "franchises include Sports Experts, Intersport, Nevada Bob's Golf and Fitness Source" (CALGARY HERALD, 5/10).