NEW YORK (TheStreet) -- Shares of Dick's Sporting Goods (DKS) - Get Report were lower in mid-afternoon trading on Friday after the company won a bankruptcy auction to purchase Golfsmith Int'l's U.S. business for about $70 million, sources said, Reuters reports.
Dick's will keep 30 Golfsmith locations open and retain about 500 employees. The rest of the stores will be shut down with help from liquidators at Hilco Global and Tiger Capital, the sources added.
Golfsmith, which is owned by OMERS Private Equity, had 109 stores in the U.S. when it filed for bankruptcy last month and has been closing locations ever since, according to Reuters.
Dick's, a Coraopolis, PA-based sports retailer, will also acquire Golfsmith's intellectual property in the deal, the sources noted.
Worldwide Gold Shops had reportedly placed competing bids for Golfsmith's U.S. business.
The results of the auction are pending approval by a U.S. bankruptcy court judge, Reuters reports.
Separately, TheStreet Ratings objectively rated Dick's stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "buy" with a ratings score of B.
The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins.
You can view the full analysis from the report here: DKS