At an extraordinary meeting held at the end of May, the shareholders of Intersport Danmark unanimously accepted the offer made by Arev & Straumur to acquire control of their cooperative, forming a new holding company in which they will retain a stake of nearly 25 percent. All of the 45 shareholders voted to sell their shares in Intersport Danmark and 85 percent of them confirmed that they intend to sell their stores to the new company at the conditions laid out by Arev & Straumur. The remaining 15 percent, who represent less than 10 percent of the turnover of the Danish retail group, will be given the possibility of acting as independent Intersport franchisees.
Arev & Straumur has made a similar offer to the shareholders of Sport Danmark, the other major Danish buying group in the sporting goods sector, which works together with Sport 2000 International. Its retail members, which trade for the most part under the Sport-Master banner, are reportedly expected to make up their minds in a few weeks’ time. The proposal currently on their table is to get them to become shareholders in a larger retail group where the Intersport and Sport-Master banners would be preserved as alternatives for the final consumer.
Arev & Straumur is an Icelandic consortium made up of the capital fund Arev and an investment bank, Straumur. It approached the two Danish buying groups last year. After obtaining an agreement in principle for the sales of their assets, they went into a lengthy due diligence process where each retail member was audited in order to come up with a specific offer for its local retail operations.
At their extraordinary meeting a few days ago, the shareholders of Intersport Danmark passed the resolutions that will allow the legal process for the transfer of their share and assets, which should be completed by Sept. 1. The present management, led by Mikael Kold, is expected to remain in place.
Under him, Intersport Danmark doubled its turnover in the last 10 years, while the operating margins of the group before amortization and depreciation (EBITDA) grew from 3 percent to over 10 percent of revenues, including those of the retailers themselves and of their common service organization. The retail turnover rose last year by close to 10 percent on a same-store basis, reaching about 1.2 billion Danish kroner (€160.9m-$249.7), in a market that grew by an estimated 7-8 percent. In 2007 Intersport Danmark also acquired SportDirect, a Danish B2B concept operating especially in team sport products and company selling.
As of last Dec. 31, Intersport Danmark had a network of 86 Intersport stores, eight other stores trading under different names and 28 SportDirect outlets. None of the former retail members left the group during the due diligence proceedings, whereas new ones joined in.
The new owners want to achieve continued organic growth – all the while cutting costs wherever possible in order to compete more efficiently in the segment. All employees will be kept on board in the new structure, which will continue to be licensed by Intersport International.
Intersport Danmark was originally born of Dania Sport, a small buying group founded in 1959 and made up of only a few sporting goods retailers and camping outlets. It became part of Intersport International in 1968 as one of the founding members and was then transformed into a public company – Intersport Denmark – after a difficult period during the 1990s. At that time Industriefinans, the Norwegian company that owned Gresvig and held the Intersport license for Norway and Poland, bought a 50 percent stake in the company in order to penetrate the Danish market and to obtain broader economies of scale. It also bought up several stores including those of Kurt Larsen, the largest independent Intersport retailer in the country at that time.
In true Viking style, the Danes struck back a few years later and bought out the Norwegians’ share and shops, going on to form Intersport Odense as a subsidiary of Intersport Danmark – after the town where the head office is based. Led by Kold and Larsen, Intersport Odense expanded the business and in 2006 the Larsen family bought the entire Intersport Odense from Intersport Danmark. The Larsen family has agreed to sell its stores to the new company and is expected to continue to be involved in the operation after the transaction is completed.
