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April 4, 2012 /PRNewswire/ -- Dick's Sporting Goods, Inc. (NYSE: DKS) announced today that it has agreed to make a
20 million pounds Sterling strategic investment in JJB Sports plc, a leading U.K. sports retailer.
Under the terms of the agreement, Dick's Sporting Goods will purchase 18.75 million pounds in junior secured convertible notes and 1.25 million pounds in ordinary shares of JJB Sports, subject to the approval of JJB's shareholders. In addition, Dick's has been granted the option to purchase an additional 20 million pounds in junior secured convertible notes of JJB in connection with a follow-on financing expected to take place in the first fiscal quarter of 2013. Subject to certain conditions, the notes are convertible into ordinary shares of JJB Sports at Dick's election. Upon full conversion of the notes, Dick's would become a controlling shareholder of JJB. Certain current shareholders of JJB are also expected to participate in the 2012 and 2013 financings through the subscription for 10 million pounds and 5 million pounds, respectively, of additional ordinary shares of JJB.
In conjunction with its investment in JJB Sports, Dick's will be entitled to nominate up to two non-executive directors to serve on the Board of JJB. Dick's will also be entitled to Board observer rights under certain circumstances.
"This is an exciting strategic investment that provides us with a valuable introduction into the workings of the
United Kingdom sporting goods market from an established company that shares our commitment to serving the needs of core athletes," said
Edward W. Stack, Chairman and CEO. "By partnering with JJB, we will be positioned to share our more than 60 years of operating experience in
the United States while gaining insight into the specific needs of U.K. athletes, which will serve as a stepping stone for our company's future growth and development."
"Our alliance with Dick's, along with the support of our current shareholders and key vendors, gives JJB a significant capital infusion, which we will use to restructure our business, refresh and refit our stores, and build our position as one of the U.K.'s market-leading sporting goods stores," said
Keith Jones, CEO of JJB Sports. "As we pursue these initiatives, we also look forward to drawing on Dick's valuable intellectual capital, which is backed by extensive experience in serving core athletes in the U.S. market."