LONDON (dpa-AFX) - Sports Direct International plc (SDIPF.PK, SPD.L) said that it has entered into an agreement to sell its rights to the Dunlop brand and related wholesale and licensing businesses to Sumitomo Rubber Industries Ltd. or SRI for a cash consideration of US$137.5 million, as adjusted for net debt and working capital on completion.
As part of the Transaction, SRI will grant Sports Direct a royalty free licence to continue to use the Dunlop brand for premium workwear and safety wear for Sports Direct's own retail purposes. SRI has the option to acquire these rights in the future subject to certain mechanical conditions for US$12.5 million.
The companies will also enter into certain other commercial arrangements in relation to the supply of products to the Sports Direct core business.
Sports Direct intends to use the proceeds of sale from the Transaction in its commitment to its third party brand relationships.
The Transaction is conditional upon merger clearance in Germany and the Philippines. Subject to merger clearance being received/granted in those jurisdictions, the Transaction is expected to complete before 31 May 2017.
The Dunlop Business currently operates in the UK, Europe, Asia (except Japan, Korea and Taiwan), USA and Canada. For the year ended 24 April 2016, it had combined revenue of 42.64 million pounds, gross assets of 41.76 million pounds and profit before tax of 4.06 million pounds.
Copyright RTT News/dpa-AFX