Gander Mountain no longer has to do business with one hand tied behind its back.
The St. Paul-based sporting goods retailer said Thursday that it has purchased Overton's Inc., a water sports and marine accessories seller, for $70 million. The acquisition will help Gander sell its products online and through catalogs for the first time in more than a decade. Legal problems prevented such sales until a legal ruling in July.
"It's a very exciting day for us because it means we've officially reentered the direct business," President and CEO Mark Baker said in an interview. The deal allows Gander to "sell all of our products in all 50 states and Canada in the coming quarters."
Adding Overton's to the mix could help smooth some of the seasonal fluctuations each company experiences for opposite reasons -- Gander needing cold weather to stimulate sales of hunting and outerwear and Overton's needing sunny skies in spring and summer to entice boaters and skiers to the water.
Gander Mountain also announced a third-quarter loss of $5.1 million, or 25 cents a share, from income of $2 million, blamed mostly on warmer-than usual weather. Same store sales fell 8.4 percent during the quarter ended Nov. 3.
On news of the acquisition, the company's stock gained 16.8 percent, or 79 cents, to close regular trading at $5.49. But the third-quarter loss, revealed after the market closed, wasn't so well received. The stock was down 7 percent in after-hours trading to $5.10.
Overton's, based in Greenvile, N.C., earns the bulk of its $90 million in sales through the Internet and the 15 million catalogs it distributes each year. Gander Mountain bought Overton's from Linsalata Capital Partners, a private equity firm based in Cleveland. The price includes repayment of Overton's debt and was financed by issuing $24 million in Gander Mountain common stock at $5.90 a share plus a $40 million loan through Bank of America.
A federal judge ruled this summer that Gander could use its name and distinctive goose logo to market directly to customers. The company had been barred from online and catalog sales since 1996 when Gander's previous owners, hoping to avoid bankruptcy, sold its direct-marketing division and a short-term trademark license to Cabela's for $35 million. The deal also included a seven-year noncompete clause, which generated additional litigation between the rivals.
Jackie Crosby • 612-673-7335
3rd quarter FY2007, 11/3
2007 2006 % chg. Revenue $259.5 $246.5 +5.3 Income -5.1 2.0 -- Earn/share -0.25 0.14 -- 9 months
Revenue $651.8 $584.6 +11.5 Income -37.6 -28.5 -- Earn/share -1.86 -1.99 -- Figures in millions except for earnings per share.
