Super Retail Group Ltd. (SUL), an Australian owner of camping and auto-parts stores, agreed to pay A$610 million ($630 million) for Rebel Group as it expands into sporting goods.
The acquisition of Australia’s largest sporting-goods retailer from buyout firm Archer Capital will be funded with debt as well as cash from A$334 million of new stock Super Retail plans to sell through an entitlement issue, the Brisbane- based company said in a filing today. The new shares will be sold at A$5.34 apiece, an 18 percent discount to the closing price on Oct. 14.
Australia’s largest retail acquisition since 2008 will add 128 stores with annual revenue of A$603 million under the Rebel, Amart and Performance Sports brands to bolster sales in Australia’s leisure market. Super Retail paid about 7.9 times profit before interest, tax, depreciation and amortization, compared with the 9.4 times median of 18 acquisitions of retailers in Australia over the past five years, according to Bloomberg data.
“The multiple is pretty good for Super Retail and it’s a business that will fit them nicely,” said Peter Esho, chief market analyst at Sydney-based City Index Australia Pty. “They are picking up a premium brand at a time when discretionary retail has been pretty soft.”
Super Retail trading was suspended on the Australian Stock Exchange today. The shares have gained 6.7 percent this year, compared with a 9.9 percent drop on the benchmark S&P/ASX 200 Index.
Camping, Auto Stores
Super Retail owns stores including Supercheap Auto, Ray’s Outdoors, Goldcross Cycles and BCF which sells boating, camping and fishing equipment.
Rebel had ebitda of A$77 million last year and will increase Super Retail’s earnings-per-share in the 12 months ending June 2012, according to the statement. The chain says it has about 24 percent of the Australian sporting goods market.
The deal is conditional on the entitlement offer being completed.
Archer acquired Rebel Sport Ltd. in March 2007 for A$369 million and then combined it with its existing Amart Allsports business.
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