LONDON (Alliance News) - Findel PLC on Tuesday said it has completed the sale of its Kitbag business to Fanatics UK Holdings Ltd for GBP11.6 million in cash.
Findel's Kitbag is a specialist sports retailer which operates through its own online platform as well as managing officially-licensed club or sports organisation retail outlets. The business had been struggling, leading Findel to undertake a strategic review in 2014, but last May it said it concluded that it would be in the best interests of shareholders to keep hold of the business.
However, on Tuesday, the UK home shopping and education business said it now believes the sale of Kitbag to Fanatics to be in the best interests of shareholders, Kitbag's employees and its business partners.
Fanatics is a newly-formed subsidiary of US sports merchandiser Fanatics Inc.
Findel said the cash proceeds will be used to further reduce its bank debt and to help drive further growth within its core businesses Express Gifts and Findel Education.
It also added that as a result of the reduced scale of the group following the disposal, the appointment of a chief executive is no longer necessary, meaning it will continue to be led by a chairman in the medium term.
Findel Chairman David Sugden, who has filled the role since March pending the appointment of a CEO, does not wish to take on the commitment for an extended period. Therefore, a search for a replacement will commence immediately, Findel said.
"We believe that this transaction represents a good outcome for all concerned. As Kitbag builds upon its strengthened position, it will benefit from the expertise and international presence in this marketplace that Fanatics offers," Sugden said in a statement.
"As for Findel, this deal will strengthen our balance sheet and significantly reduce our average working capital requirement, which is consistent with our ambition to focus our resources more fully on driving growth within our core home shopping and education businesses," he added.
Shares in Findel were trading up 4.4% at 200.00 pence early Tuesday.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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