[ClamperGolfer]

This just came through from Sporting Goods Business...

Dick's Sporting Goods to Acquire Golf Galaxy
SportsOneSource Media Posted: 11/13/2006

Dick's Sporting Goods, Inc. and Golf Galaxy, Inc. have entered into a definitive agreement and plan of merger whereby Dick's will acquire Golf Galaxy. Under the terms of the agreement, each outstanding share of Golf Galaxy common stock will be converted into the right to receive $18.82 per share in cash, without interest. The Merger Agreement also provides for the assumption of outstanding employee stock options and warrants of Golf Galaxy, except that, the holders of vested in-the-money options and warrants will be permitted to elect to cash out such options and warrants. The Merger Agreement contains a provision related to limited solicitation of third-party proposals and a customary fiduciary out for unsolicited proposals.

Dick's offer represents a premium of 19% over Golf Galaxy's closing stock price as of November 10, 2006. Based on approximately 11.7 million outstanding Golf Galaxy shares, the transaction would be valued at approximately $225 million. The transaction will be financed using Dick's existing credit facility.

Completion of the transaction is contingent upon various conditions, which are more fully set forth in the merger agreement, and includes, among other things, approval of the transaction by Golf Galaxy's shareholders. The merger transaction is anticipated to be completed not before February 6, 2007, subject to Hart-Scott-Rodino approval under United States antitrust laws and customary closing conditions.

Certain holders of Golf Galaxy's common stock have entered into a voting agreement with Dick's where they have agreed to vote 19.9% of the outstanding common stock in favor of the merger at the special shareholders meeting. In addition, Dick's has agreed to the terms and conditions of management agreements with certain key executives of Golf Galaxy which will be executed upon closing of the merger. Golf Galaxy's management team is expected to remain in place following the closing of the merger.

Golf Galaxy currently operates 61 stores in 24 states, ecommerce websites and catalog operations, and generated $250 million in sales during the last 12 months ended August 26, 2006.

Dick's management anticipates that the acquisition will be accretive in fiscal 2007. Earnings guidance will be provided with Dick's year end earnings release in March in connection with Dick's standard practice.

"Golf Galaxy is a rapidly growing, profitable company which we believe is the best in the specialty golf category. The passion with which Dick's Sporting Goods and Golf Galaxy associates serve the enthusiast golfer make this transaction a big win for shareholders and golf enthusiasts alike," said Edward W. Stack, Chairman and CEO of Dick's Sporting Goods.

"We are excited to join forces with Dick's Sporting Goods, who we believe is the premiere full-line sporting goods retailer in the industry," said Randy Zanatta, Chairman, President and CEO of Golf Galaxy, Inc. "We look forward to having access to the resources and support of the Dick's Sporting Goods organization which will strengthen our position as the best golf specialty retailer in the industry."

Peter J. Solomon Securities Company Limited provided financial advisory services to Dick's Sporting Goods in connection with the transaction. Piper, Jaffray & Co. has provided financial advisory services to Golf Galaxy in connection with the transaction.

[steve81]

big news. cant wait to climb the "rock wall" at my next driver fitting!

[abewley]

great .. now GG will be sporting more "special" TM stuff

[Bridgestone4life]

So this means they are closing GG's and moving them in with dicks?

[wedgetoafoot]

Not sure what others think, but big retailers are bad enough for product knowledge and service already... to me this just makes GG worse. I know I wouldn't buy a club from the Sports Authority and that is essentially what GG will become under Dick's. Something about having only golf products in a store gives the store at least some credibility that Dick's doesn't have. Golfsmith just earned my business without even trying, not bad.

[JGalls]

This is awful...Dick's sucks.

[slicer365]

Sweet, I was really looking forward to quit going there. Edwin Watts will be taking over my business. Now I can finally get over my hoing for a while and start saving for a house.

That is after I switch my entire bag to Cobra, of course.

[Charlie_Foxtrot]

JGalls, on Nov 13 2006, 02:34 PM, said:

This is awful...Dick's sucks.

nah, too easy.

[mcbush25]

Charlie_Foxtrot, on Nov 13 2006, 05:04 PM, said:

JGalls, on Nov 13 2006, 02:34 PM, said:

This is awful...Dick's sucks.

nah, too easy.

Way too easy.

On topic though I am not very fond of this move for Golf Galaxy. I really think this will hurt their rep and their sales.

[MikeJohnson]

Golf Galaxy kinda sucks anyways.

[MCDavis]

slicer365, on Nov 13 2006, 05:49 PM, said:

That is after I switch my entire bag to Cobra, of course.

hmm..so, what's gonna happen to all those non-Cobra's in your bag?

[Charlie_Foxtrot]

mcbush25, on Nov 13 2006, 03:07 PM, said:

Charlie_Foxtrot, on Nov 13 2006, 05:04 PM, said:

JGalls, on Nov 13 2006, 02:34 PM, said:

This is awful...Dick's sucks.

nah, too easy.

Way too easy.

On topic though I am not very fond of this move for Golf Galaxy. I really think this will hurt their rep and their sales.

Since there aren't any Golf Galaxies or Dick's near me, I don't care. But, for the sake of argument, I suppose it depends on how the merger will be handled. If Golf Galaxy remains a distinct entity and a Golf only store, the changes will likely be behind the scenes only (greater bargaining power with the manufacturers for lower prices?).

But if they turn all the GGs into Dick's, I think they will lose their primary customers, who go into golf stores because they don't want to wade through all the non-golf crap, want a complete selection, and want sales people who know about golf equipment not just the latest Volcom hoodies (yes, I know that last one can be a stretch anyway.)

We only have Sports Authority, Big 5, and G.I. Joe's "big box" stores here. Our local golf stores are Puetz and Pro Golf Discount. Frankly, I would at least like to have the option of a Golfsmith or Golf Galaxy.

Then again, I'd also like to have Tiger Woods' swing . . .

[MCDavis]

If they're smart, they'll move all of their golf business to GG and use that space in Dick's for something else.

Dick's did help me once in golf...found my V Steel 3 wood on clearance with some very minor scratches from being in the store.

[senseigolfer]

First Galyan's, now Golf Galaxy
Too Bad!!

[dmbrill]

I disagree with moving all golf equip to GG.

There are too many customers looking for a "one-stop" shopping experience and Dick's would lose some golf sales from those customers. Not to mention the people that drop by the golf section while in the store to get gloves, balls, etc. Also, there are a whole lot more Dick's than GG's, so if they stopped selling golf equip at Dick's, they'd take a major cut in overall golf sales.

A little while ago Dick's opened up a handful of golf specific stores, called The Golf Shop. I wonder if this was testing the market to see if they could compete with GG, or if they were just testing how a golf specific store would hurt golf sales at the standard Dick's stores.

Also, I wonder what this does for GolfWorks?

[Charlie_Foxtrot]

dmbrill, on Nov 13 2006, 03:55 PM, said:

Also, I wonder what this does for GolfWorks?

What is GolfWorks?

[tbowles411]

We have a Dick's in Manassas (hey, I don't make this stuff up)....

I just don't know if this will be good or not. I like my little golf store. The workers at Dicks's look like they don't want to be there. The only thing that might be better is that they may become a full service store. Who knows....

[tbowles411]

Charlie_Foxtrot, on Nov 13 2006, 06:59 PM, said:

dmbrill, on Nov 13 2006, 03:55 PM, said:

Also, I wonder what this does for GolfWorks?

What is GolfWorks?

The clubmaking component of the company. They sell all of the heads, grips, shafts, etc.

[Gxgolfer]

GG bought golfworks this year...

http://www.worldgolf..._war_breaks_out

http://www.golfworks.com/Default.asp?

[Charlie_Foxtrot]

tbowles411, on Nov 13 2006, 04:02 PM, said:

Charlie_Foxtrot, on Nov 13 2006, 06:59 PM, said:

dmbrill, on Nov 13 2006, 03:55 PM, said:

Also, I wonder what this does for GolfWorks?

What is GolfWorks?

The clubmaking component of the company. They sell all of the heads, grips, shafts, etc.

Gxgolfer, on Nov 13 2006, 04:03 PM, said:

GG bought golfworks this year...

http://www.worldgolf..._war_breaks_out

http://www.golfworks.com/Default.asp?

Gotcha, thanks.

[autotrader]

I think this is funny because less than 6 months ago a new 2 story Dick's opened in Winston Salem. About 2 months ago Golf Galaxy started building their first store in Winston less than 500 yards away in an adjacent shopping center. It's not even open yet. It'll be interesting to see what happens...

[mr_divots]

Oh well. Could GG get any worse anyway?

Maybe Callaway sees where things are headed with Golf retail and that spurred their shop.callaway.com or whatever it's called.

GG eats up all the little guys just to be eaten up by a bigger big box. Golf retail just got that much worse.

[Ty Webb]

Cleaned up per request of the ... I must admit rightfully so... but if you saw it you would have laughed your a$$ off!!!

[packerfan1]

I buy a fair amount of golf equipment at Dick's...both name brand and 'Acuity' or off brand...no Golf Galaxies around my house, anyhow.

Dick's isn't too bad, especially for high handicappers like me. If I was a really good golfer I wouldn't trust them for equipment advice, but for my game, they do OK. We have 2 knowledgeable salespeople at our Dick's that I look for when I am shopping there.

And yes, when I am buying cleats or equipment for the kids (a two or 3 time a year event, minimum, with 3 boys high school to 4th grade, all in sports), I usually stop by the golf area of Dick's and end up buying something.

[chrisfx811]

I don't know if GG paid their employees better than the average retail store, but I can't imagine this will do anything but drive wages down, and the quality of the buying experience will suffer for it.

[NYKnuckleballer]

ClamperGolfer, on Nov 13 2006, 05:09 PM, said:

Under the terms of the agreement, each outstanding share of Golf Galaxy common stock will be converted into the right to receive $18.82 per share in cash, without interest.

While there may be a Dick's in Manassas and that is funny and all...you guys are looking at this from the wrong perspective. GGXY is currently trading at $15.65 per share.

Later,
Knuckles

[cmarkmyers]

Our Golf Galaxy just put in a few aisles with Golf Works club making components although they really aren't properly stocked or staffed yet. Hopefully this buy out won't affect (or is it effect?) that but I am sure it will be months and months before we see any noticable impact.

[MOJO14]

In my opinion I like having a golf specific store to go to rather than a all-sports store and of the ones we have I think Golf Galaxy is the best. There is a Sports Authority 5 miles from my house but I would much rather drive the 35-40 minutes to the Golf Galaxy to have the added selection and service. If they do combine Dick's and GG I will go back to shopping at NY Golf. I guess all good things eventually must end....

[05_g35]

this is interesting because Dick's just opened a store in Franklin, TN that is about a mile from Golf Galaxy. maybe they will both continue to operate like they do now. that Golf Galaxy is a great store with some very knowledgeable employees, but the Dick's store is like going to Wal-Mart to buy clubs. i had never been to a Dick's store until saturday and i will probably not go back, the store was full of equipment that was not suited for me.

[dansrixon]

What I think will be intersting is , Srixon does not do business with with Dick's, yet golf galaxy is one of their biggest customers. Should be intersting to see how that plays out.

[senseigolfer]

dansrixon, on Nov 14 2006, 10:04 AM, said:

What I think will be intersting is , Srixon does not do business with with Dick's, yet golf galaxy is one of their biggest customers. Should be intersting to see how that plays out.

Neither does Titleist (clubs), Mizuno or Ping. Interesting to see if they can resist the "WALMART" of Golf!!!

[HipCheck]

I don't have a Golf Galaxy near me so I can't comment on them.

But if you're going to Dick's for golf knowledge, then you don't know Dick's.

[golfebj]

That totally sucks because that means DSG now owns Golfworks.

[ikegoody]

senseigolfer, on Nov 14 2006, 11:34 AM, said:

dansrixon, on Nov 14 2006, 10:04 AM, said:

What I think will be intersting is , Srixon does not do business with with Dick's, yet golf galaxy is one of their biggest customers. Should be intersting to see how that plays out.

Neither does Titleist (clubs), Mizuno or Ping. Interesting to see if they can resist the "WALMART" of Golf!!!

I live near one of The Golf Shop locations, and they actually have a pretty large stock of Titleist and Mizuno. Still no Srixon or Ping, though.

[arkstorm]

I read a press release today citing that Dicks says it will keep GG operating in its current form.

[divot46]

Had an experience at Dick's I thought was rather amusing. I have had some decent buys there but overall I don't shop there much anymore. This will tell you about the knowledge level of the employees. I took an old Titleist PT23 in just for a quick grip change since I already had the grip and all. When I went to pick up the club, the kid said it was a nice "hybrid" club. It was hard not to bust out. I told him it was a fairway wood and he couldn't believe it. I will admit in his defense that the head on that PT is way smaller than any hybrid you can get.

[mikpga]

Well Golf Galaxy put Second Swing out of business...

Now Dicks owns the Galaxy...

It will be interesting to see how they mesh the job descriptions of the PGA Professionals...

Dick's you can sell and fit...

Golf Galaxy you can teach...

Interesting...

[jscw]

I'm happy the merge if the golf dept of Dicks become a small GG.
Why? I've two dicks ( ) around and no GG, now 2nd Swing is gone, and I want some B&M stores to get some decent used clubs.
I just scored a yamaha blade 1 iron, for 5 bucks in my golf course. (The owner lost it in the course and apparently he didn't want to get it back.) Never hit 1 iron before, 5 bucks, nothing to lose
(PS: hit a couple of balls in range, just a little harder than 4i)

[dukesweb]

There are 2 GG near me and 1 Dick's Sporting Goods. Dick's is just like Sports Authority with a few different brands. I hope they leave GG alone. I never go to Dick's for any golf equipment. You only go if you want a Callaway, TaylorMade or Nike brand club, a Cleveland wedge or an Odyssey 2-ball putter.
Oh yea, and a bunch of Walter Hagen crap.

Well we also have a couple of Pro Golf Discount's that they must compete against.

[DiscountDansGolf.com]

Once again I will say, I cannot beleive you guys are still buying from either of these stores.



Silly golfers, MAP prices are for lawyers, and doctors.