Business Context and Reporting Period
Company: Sportsman's Warehouse Holdings, Inc. (SPWH)
Filing Type: Form 8-K (Current Report)
Date of Report: September 28, 2019
Event: Entry into a Material Definitive Agreement to acquire assets from DICK'S Sporting Goods, Inc.
Key Financial Metrics and Transaction Details
- Transaction Value: Approximately $28 million aggregate consideration (Purchase Price).
- Assets Acquired: Cash, inventory, furniture, fixtures, equipment, and other assets related to up to eight Field & Stream stores.
- Store Locations: New York (2), Pennsylvania (3), North Carolina (2), and Michigan (1).
- Payment Terms: Paid at closing, except 50% of the agreed inventory value payable within 90 days post-closing.
- Funding Source: Borrowings under the Company's senior revolving credit facility (led by Wells Fargo Bank).
- Financial Statements: This filing does not provide standalone revenue, profit, cash flow, margin, or debt metrics for the Company.
Material Changes and Operational Impact
The Company has entered into an Asset Purchase Agreement to expand its footprint by acquiring up to eight stores from a competitor. This represents a material change in the Company's asset base and geographic presence. The transaction is subject to closing conditions and is expected to close on or around October 11, 2019.
Outlook, Management Commentary, and Risks
- Closing Timeline: Expected on or around October 11, 2019.
- Lease Arrangements: The Company will enter into subleases with DICK'S for each acquired location upon closing.
- Transition Services: DICK'S will provide transition services for up to 120 days post-closing.
- Risks/Contingencies: The acquisition is contingent upon the satisfaction or waiver of certain closing conditions by both parties.
- Unusual Items: None reported in this filing.
Investor Verification Checklist
- Verify the final number of stores acquired (up to eight) and the final purchase price after post-closing adjustments.
- Confirm the successful closing of the transaction on or around October 11, 2019.
- Review the impact of the $28 million expenditure on the Company's liquidity and debt covenants under the Wells Fargo credit facility.
- Assess the performance of the acquired Field & Stream locations post-transition period.