Kleeneze Plc (“Kleeneze” or the “Group”), the leading home shopping specialist, announces the acquisition of Kitbag Sports Limited (“Kitbag”), a market leading internet sports retailer on kitbag.com .
Kitbag sells a wide range of branded and own label sports and fitness merchandise through kitbag.com . In addition, they have long term contracts with a number of leading football clubs for the provision of their online and mail order sales in the UK and certain other territories. These contracts include Manchester United, Chelsea and Barcelona.
The total UK sports goods market is worth over £4.5 billion and has grown over 25% since 1999 (Source: Mintel). Of this, 75% was accounted for by clothing and footwear, which is Kitbag’s key market place. The football replica kit market, in which Kitbag is a major player, has been a key driver of this growth and this market is estimated to be worth more than £200 million per annum.
As set out in our acquisition of I Want One of Those.com on 26 October, 2004 we are developing a range of products that can be sold across our distribution channels of network marketing, catalogues, the internet and, most recently, television shopping, through eeZee tv (Sky channel 659). Kitbag’s products will sell well into our combined audience.
Kitbag brings a proven e-commerce and back office software solution, as well as extensive website building and IT development skills, which will further enhance the skills base at I Want One of Those.com. Kitbag’s experienced management team will be staying with the Group.
The consideration is £6.0 million paid in cash and the issue of 1,309,898 Ordinary shares of 5p each in Kleeneze plc, over 75% of which will be retained by certain vendors for at least 12 months. An amount of £0.3 million in cash has been held as contingent deferred consideration.
For the financial year ended 31 July 2004, Kitbag reported turnover of £8.0 million generating gross profits of £3.4 million. Net liabilities on acquisition are estimated to be £0.6 million.
Application will be made for the 1,309,898 shares to be admitted to the Official List of the UK Listing Authority and to the London Stock Exchange for admission to trading.
William Rollason, Chief Executive of Kleeneze plc, commented:
“I am very excited about the acquisition of Kitbag as it is a further step in our development as a multi-channel retailer and adds another strong product range to our existing businesses. We have acquired another market leading internet business, which will strengthen our growing internet division. Kitbag’s highly regarded management team is staying with us and I welcome Richard Styles and his team to the Group.”
Richard Styles, Chairman of Kitbag, said:
“We are delighted to be joining Kleeneze as this will enable us to fast track the growth of our business, both organically and through the additional audience within the enlarged group. We all look forward to working with William and his team.”
Released: 04/04/2005
“I’m think this is a great move for Kleeneze. These are the kind of products that will sell well in our catalogues, certainly around the time of major sporting events. Think back to the Euro and World Cup footall tournemants – how many England flags and other pieces of merchandise were sold? Roll on World Cup 2006!” – Paul Flintoft