Web site developer buys sports site Fogdog
Global Sports buys the troubled sporting goods site, which also lays off 20 employees, in a stock deal valued at more than $38 million.
Fogdog also laid off more than 20 people on Tuesday, a source close to the company said, adding that it will lay off most of its 140-person staff in the coming months as part of the acquisition.
Fogdog shareholders will get 0.135 shares of Global Sports for every Fogdog share they own. Global Sports will issue 4.95 million shares and has agreed to assume all of Fogdog's outstanding debt.
Fogdog is the second online sporting goods store to be acquired this month. Two weeks ago, online discount store Overstock.com acquired Gear.com for an undisclosed amount.
There has been little if any good news in the past six months for Redwood City, Calif.-based Fogdog, which has seen its share price plummet following its initial public offering. At the close of trading Tuesday, Fogdog was trading at 88 cents--far from its 52-week high of $22.
Former president Tim Joyce left for personal reasons in July, and Fogdog's chairman quit in May.
Fogdog has a tangible net worth of about $45 million and another $42 million in cash and securities, King of Prussia, Pa.-based Global Sports said in a statement.
Global Sports plans to integrate some of Fogdog's e-commerce applications into its e-commerce plans. A major part of Global Sports' business is building Web sites for sporting goods stores.
The deal is expected to close in the first quarter of 2001, pending regulatory approval.