Filed by Global Sports, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 of
the Securities Exchange Act of 1934
Subject Company: Ashford.com, Inc.
Commission File No. 000-27357
FOR IMMEDIATE RELEASE
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GLOBAL SPORTS, INC. TO ACQUIRE ASHFORD.COM, INC.
Transaction Expected to be Accretive to Global Sports' 2002 Results
Global Sports to Utilize Ashford.com as a Platform to Extend E-Commerce
Outsource Solution to the Luxury Goods and Corporate Gifts Categories
KING OF PRUSSIA, PENNSYLVANIA and HOUSTON, TEXAS, Friday, September 14, 2001 --
GLOBAL SPORTS, INC. (NASDAQ: GSPT), a leading outsource solution provider for
e-commerce, and ASHFORD.COM, INC. (NASDAQ: ASFD), a leading e-commerce luxury
goods and corporate gifts company, announced today that Global Sports has
entered into a definitive merger agreement to acquire all of the outstanding
shares of Ashford.com.
Under the terms of the merger agreement, upon consummation of the merger,
Ashford.com stockholders will receive 0.0076 of a share of Global Sports common
stock and $0.125 cash for each share of Ashford.com common stock. Global Sports
expects to issue approximately 430,000 shares of common stock and pay
approximately $7.1 million of cash in exchange for all of the outstanding shares
of Ashford.com. Based on the closing price of Global Sports common stock on
September 10, 2001, the transaction is valued at approximately $14.2 million.
The transaction, which will be accounted for as a purchase, is expected to close
in late 2001 or early 2002, subject to the satisfaction of certain customary
closing conditions, including approval of the stockholders of Ashford.com. As of
June 30, 2001, Ashford.com had a tangible net worth of $27.9 million including
approximately $8.6 million in cash, cash equivalents and accounts receivable,
and approximately $18.4 million in inventory.
Transaction Expected to be Accretive to Global Sports' 2002 Results
Global Sports anticipates that its sales and pro forma earnings in 2002 will
exceed the current average of analysts' expectations due to the expected
positive impact from the acquisition of Ashford.com and the subsequent
elimination of costs by using the Global Sports e-commerce platform.
Fiscal 2002 Expectations
o Net revenue is now expected to exceed $200 million compared to the
current average of analysts' expectations of $185 million.
o Pro forma operating profit is now expected to exceed $11 million
compared to the current average of analysts' expectations of $10
million.
o Cash and cash equivalents continue to be expected to exceed $100
million on December 31, 2001.
Pro forma operating profit excludes all non-cash charges, including stock-based
compensation and depreciation and amortization expenses.
Global Sports to Utilize Ashford.com as a Platform to Extend E-Commerce
Outsource Solution for the Luxury Goods and Corporate Gifts Categories
Following consummation of the transaction, Global Sports intends to extend its
outsource e-commerce solution to retailers in the luxury goods category and
expand Ashford.com's e-commerce outsource solution in the corporate gifts
category. Ashford.com already manages e-commerce corporate gift programs for a
number of Fortune 500 companies. Ashford.com would become the 24th e-commerce
Web site to run on Global Sports' e-commerce platform and the first within the
luxury goods and corporate gifts categories.
Michael G. Rubin, Chairman and Chief Executive Officer of Global Sports, Inc.,
commented, "This acquisition represents a significant step forward in our
strategy to expand selectively beyond our initial category of sporting goods.
Importantly, in addition to the growth potential of extending our platform to
operate Web sites within the luxury goods and corporate gifts categories, we
expect that this acquisition will meet our principal criteria for category
expansion initiatives by being incrementally profitable."
Commenting on the transaction, David Gow, Chief Executive Officer of
Ashford.com, said, "I am extremely proud of our people and the company's
accomplishments in successfully building a leadership position in the online
luxury goods and corporate gifts categories. We believe that Ashford.com will
provide an incredible platform for Global Sports to implement its unique
business model to operate multiple Web sites within our categories."
About Global Sports, Inc.
Global Sports is a leading outsource solution provider for e-commerce. The
company develops and operates e-commerce businesses for retailers, media
companies, and professional sports organizations. The Global Sports' platform
includes Web site design and development, e-commerce technology, customer
service, fulfillment, merchandising, content development and management, and
online and database marketing.
About Ashford.com, Inc.
Ashford.com is a e-commerce luxury goods and corporate gifts company. The
company's two e-commerce sites, www.ashford.com and
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www.ashfordcorporategifts.com, offer 12,000 attractive gifts and rewards,
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including watches, jewelry, fragrances, leather accessories, diamonds,
sunglasses, and writing instruments from 300 leading brands.
Forward-Looking Statements
All statements made in this release, other than statements of historical fact,
are forward-looking statements. The words "anticipate", "believe", "estimate",
"expect", "intend", "will", "guidance", and similar expressions typically are
used to identify forward-looking statements. Forward-looking statements are
based on the then-current expectations, beliefs, assumptions, estimates and
forecasts about the businesses of Global Sports and Ashford.com and the
industries and markets in which the companies operate. Those statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions which will be difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed or implied by
those forward-looking statements. Factors which may affect Global Sports' and
Ashford.com's businesses, financial condition and operating results include the
effects of changes in the economy, consumer spending, the stock market and the
industries in which they operate generally, changes affecting the Internet and
e-commerce, the ability of the companies to maintain relationships with
strategic partners and suppliers, the ability of the companies to timely and
successfully develop, maintain and protect their technology and product and
service offerings and execute operationally, and the ability of the companies to
attract and retain qualified personnel. More information about potential factors
that could affect Global Sports and Ashford.com can be found in their most
recent Forms 10-K, Forms 10-Q and other reports and statements filed by Global
Sports and Ashford.com with the Securities and Exchange Commission. Each of
Global Sports and Ashford.com expressly disclaims any intent or obligation to
update those forward-looking statements, except as otherwise specifically stated
by it.
Additional Information and Where to Find It
Global Sports plans to file a Registration Statement on SEC Form S-4 in
connection with the merger, and Ashford.com expects to mail a Proxy
Statement/Prospectus to stockholders of Ashford.com containing information about
the merger. Investors and security holders of Ashford.com are urged to read the
Registration Statement and Proxy Statement/Prospectus carefully when they are
available. The Registration Statement and the Proxy Statement/ Prospectus will
contain important information about Global Sports, Ashford.com, the merger and
related matters. Investors and security holders will be able to obtain free
copies of these documents through the Web site maintained by the U.S. Securities
and Exchange Commission at http://www.sec.gov. Free copies of the Proxy
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Statement/Prospectus and these other documents may also be obtained from
Ashford.com by directing a request through the Ashford.com Web site at
http://www.ashford.com or by mail to Ashford.com at Ashford.com, Inc.,
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Attention: Investor Relations Department, 3800 Buffalo Speedway, Suite 400,
Houston, TX 77098.
In addition to the Registration Statement and the Proxy Statement/Prospectus,
Global Sports and Ashford.com file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, statements or other information filed by
Global Sports and Ashford.com at the SEC public reference rooms at 450 Fifth
Street, N.W., Washington, D.C. 20549 or at any of the SEC's other public
reference rooms in New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Global
Sports' and Ashford.com's filings with the SEC are also available to the public
from commercial document-retrieval services and at the Web site maintained by
the SEC at http://www.sec.gov.
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Interests of Certain Persons in the Merger
The directors and executive officers of Global Sports and Ashford.com have
interests in the merger, some of which may differ from, or may be in addition
to, those of Ashford.com's stockholders generally. A description of the
interests that Global Sports' and Ashford.com's directors and executive officers
have in the merger will be available in the Proxy Statement/Prospectus.
Solicitation of Proxies
Ashford.com, its directors, executive officers and certain other members of
Ashford.com's management and employees may be soliciting proxies from
Ashford.com's stockholders in favor of the merger. The directors and officers of
Global Sports may be deemed to be participants in Ashford.com's solicitation of
proxies. Information concerning the participants will be set forth in the Proxy
Statement/Prospectus when it is filed with the Securities and Exchange
Commission.
Global Sports Contact:
Patricia Henderson
(610) 491-7013
hendersonp@globalsports.com
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Ashford.com Contact:
Thane Ryland
(608) 227-4163
tryland@ashford.com
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