Toy manufacturer Empire of Carolina Inc. said Feb. 12 it has signed a letter of intent to buy privately held Apple Sports Inc. and Apple Golf Shoes Inc. of Ronkonkoma, N.Y., in a deal valued at $15 million.
The transaction is subject to a number of conditions, including satisfactory completion of due diligence and execution of a definitive agreement. Under the proposal, Delray Beach, Fla.-based Empire will purchase all of the stock of the Apple sporting goods companies for 5 million shares of Empire common stock. In addition, Empire is to assume as much as $4.3 million of Apple debt.
Apple makes and distributes golf equipment under license from Wilson Sporting Goods Co. Empire's purchase agreement provides that the Wilson license will be extended for a minimum of five years.
``The acquisition will also allow Empire to expand into a similar industry and enlarge its customer base, which should provide additional distribution channels for some of Empire's existing toy and outdoor products,'' Bill Craig, Empire chief financial officer, said in a news release.
Empire spokesman Lawrence Gelle said by telephone Feb. 12 he could not add any details to the prepared statement.
Empire manufactures children's toys and outdoor play products, including ride-on toys and sleds. More than 50 percent of its products are sold by Toys ``R'' Us, Wal-Mart and Kmart stores.
In May, after several years of financial struggle that threatened to close Empire, private investors agreed to invest as much as $16 million to provide the firm with the necessary capital to stay in business.
For its most recent fiscal year, Empire reported sales of $148.9 million. The firm employs 640 and operates a 1.2 million-square-foot extrusion, vacuum forming, blow and injection molding facility in Tarboro, N.C.