became the retail industry's latest buyout Monday, agreeing to be acquired by a group of investors for $1.3 billion, including debt.
Private equity affiliate of Leonard Green & Partners will pony up $37.25 in cash for the discount sports equipment chain, offering investors a 19% premium to Friday's closing price at $31.05. The buyout group also includes members of Sports Authority's senior management team.
"As a private company, Sports Authority will have greater flexibility to accomplish its long-term goals," the company said. "Leonard Green & Partners has an excellent track record of building value at its portfolio companies by providing strong financial and strategic support."
The shares were recently up $6.13, or 20%, to $37.18.
While the deal received unanimous approval from the company's directors, it still has to be approved by Sports Authority's shareholders. The transaction is expected to close in the second quarter.
The company said the deal reflects the success of its previous merger with Garts Sports and that it will be "conducting a market test for the next 20 days to ensure that the transaction is the best available for our shareholders."
Merrill Lynch is acting as Sports Authority's financial adviser in the deal, while Banc of America Securities is working in the same capacity with Leonard Green, which is headquartered in Los Angeles.