Sports and fitness company Reebok (NYSE:RBK) is demonstrating how to do an acquisition well. After reporting earnings that were nothing more than a stutter step, the company completed the acquisition of the world's largest hockey equipment and related apparel company -- The Hockey Company Holdings.

The Hockey Company will be accretive (oh, I love that word) to earnings in 2004 to the tune of $0.05 to $0.10 a share. That's what you call burying the puck deep in the earnings net.

But the good news did not stop with the acquisition announcement. Cash-rich Reebok is going to retire $125 million of 11.25% senior secured notes that were extra weight dragging down The Hockey Company's earnings. Sound the buzzer (it's too old-fashioned to say "ring the cash register" anymore) for another earnings-enhancing move.

Reebok, since its last earnings report, also redeemed its own 4.25% debt and replaced it with 2% debt due in 2024. Why not lock in low rates for the long term? When you generate $170 million in free cash flow (FCF), your options seem as easy as having an open net for your slap shot.

The company has been adding the right people and making good use of its cash. For those looking to buy now, hear this: The stock has fallen 11.4% since Seth Jayson found it in April using Benjamin Graham's criteria for value investing. At 15 times earnings and 11.5 times enterprise value (EV) to FCF, the stock is inexpensive.

Critics will note that Reebok's margins are a fraction of Nike's (NYSE:NKE). But Nike trades for 22 times earnings and 16 times EV to FCF. The Nike advantage is reflected in its stock price.

Reebok earned $2.44 per share in 2003. Estimates for 2004 and 2005 are for earnings of $2.82 and $3.24 a share -- representing impressive earnings growth of 49%. The outlook is good, the current acquisition is a "great fit," and Reebok's stock is inexpensive. Need anything else be said?

Tom Gardner recommended Reebok for the March 2004 issue of Motley Fool Stock Advisor . Subscribe today and get a six-month, money-back guarantee if you (and your portfolio) aren't completely satisfied.

Fool contributor W.D. Crotty does not own any of the stocks mentioned.