Dreams Inc., parent company of hobby giant Mounted Memories, Fans Edge, Pro Sports Memorabilia and the Field of Dreams retail shops, has been acquired by Fanatics, Inc., an online seller of licensed sports products. The agreement calls for Fanatics to acquire all the outstanding shares of the company for $3.45 per share in cash for an aggregate transaction value of approximately $183 million, taking into account $25 million of outstanding debt. The offer represents a premium of 32.0% over Dreams’ closing share price of $2.61 on April 13, 2012, the last trading day prior to the announcement.
Dreams, trading under the stock symbol “DRJ”, saw its stock rise 30% after the announcement on Monday. The stock was unchanged at $3.40 per share after Tuesday’s trading.
The Board of Directors of Dreams has unanimously approved the transaction, which is subject to customary closing conditions, including the approval of Dreams’ shareholders and regulatory approvals. The transaction is expected to close in the third quarter of 2012.
Fanatics is one of the largest sellers of fan gear, including replica jerseys, shirts and jackets.
Dreams President and CEO Ross Tannenbaum, Chairman Sam Battistone and other shareholders who collectively own approximately 35% of the outstanding shares of Dreams have each entered into voting and support agreements by which they have committed to vote in favor of the proposed merger transaction.
“Fanatics shares our focus on the customer, innovation, and growth,” said Ross Tannenbaum. “This combination will enhance Dreams’ ability to achieve its goals, while realizing a significant and immediate all-cash premium for our shareholders. I am confident this merger is the right decision for Dreams and our shareholders.”
Dr. Phillip Frost, Dreams’ third largest shareholder, Chairman of Teva Pharmaceuticals and Chairman and CEO of Opko, commented: “Ross and his executive team have built a terrific company and ultimately were able to deliver meaningful value to all of its shareholders.”
“Today is an exciting day for all sports fans,” said Fanatics’ CEO Alan Trager. “We are bringing together two of the most passionate management teams in licensed sports products. The addition of Dreams will enable Fanatics to accelerate our investments in product assortment, mobile and e-commerce technology, and a regional fulfillment infrastructure to better serve our customers and our partners. Together, we will be much better positioned to deliver a superior customer experience.”
See sports memorabilia for sale at Fanatics.com.