Outdoor sports and activity retailer Sportsman's Warehouse (SPWH -3.98%) is now set to be acquired by privately held Great American Outdoors Group, according to a press release from the company published online yesterday. The cash acquisition will see the Great American Outdoors Group pay $18 per share to buy out Sportsman's Warehouse. At the time of the announcement, this represented a 42.2% premium over the stock's market value, though Sportsman's share price has risen explosively since.
The Great American Outdoors Group owns a lineup of famous name brands related to hiking, fishing, hunting, sport shooting, and other outdoor activities. These currently include Cabela's, Bass Pro Shops, and White River Marine Group, among others.
Sportsman's Warehouse has made a surprising rebound in 2020, particularly in light of the fact it barely escaped bankruptcy in 2009. The same "escape to the wide open spaces" response to COVID-19 lockdowns that gave RV retailers like Camping World Holdings (CWH -1.11%) brilliant sales success over the summer has also benefited the sporting goods sector.
During the company's Dec. 3 third-quarter 2020 earnings conference call, Sportsman's Warehouse CEO Jon Barker remarked "hunting participation across many states is up double or even triple digits this season," adding "participation in fishing, camping, and hiking continued at an elevated rate in Q3 as confirmed by national park attendance and hunting and fishing license sales."
This translated into substantial year-over-year gains for the retailer, including a 59% jump in net sales, 41% growth in same-store sales, and a scorching 134% rise in firearms sales specifically. The company has also worked to develop its e-commerce operations, with digital purchases accounting for 10% of 2020's net sales through September. The acquisition comes right when Sportsman's Warehouse is enjoying vigorous growth and success.