LOS ANGELES and MINNEAPOLIS, Oct. 23, 2003 (PRIMEZONE) -- The Mercanti Group today announced that it acted as financial advisor to K2 Inc. (NYSE:KTO) in the definitive merger agreement between K2 and Brass Eagle, Inc. (Nasdaq:XTRM). Under the agreement, Brass Eagle will become a wholly-owned subsidiary of K2. Mercanti now has served as K2's investment banker in three merger and acquisition transactions and one capital raising assignment over the last 12 months.
"We are pleased to once again play a strategic role in the continued development of K2 and its growing stable of leading sports brands," said James D'Aquila, managing director of The Mercanti Group. "K2, through its carefully executed acquisition program, is rapidly solidifying its leadership role in this fragmented field."
In the transaction announced today, each outstanding share of Brass Eagle common stock will be exchanged for 0.6036 shares of K2 common stock. Based on the average closing price of K2 shares of $16.85 for the 30 trading days ending October 20, 2003, the value of the transaction is $77.8 million, or $10.17 per share for Brass Eagle shareholders, plus assumed liabilities. The transaction, which is subject to regulatory review and other customary conditions, is expected to be completed by the end of 2003. K2 said it expects the merger will be accretive to its earnings in the first 12 months following completion of the deal.
Prior to today's transaction, Mercanti also served as exclusive financial advisor to K2 in a private capital transaction, the sale of one of its divisions and the acquisition of Rawlings Sporting Goods Company, Inc. (Nasdaq:RAWL), which was completed in March of this year.
About The Mercanti Group
The Mercanti Group, founded in 2001, is a boutique investment bank focused on providing Merger & Acquisition, Capital Raising and Strategic Advisory services to middle market companies, private equity firms and individual business owners. Mercanti predominantly concentrates on four primary industries: consumer and retail, technology, health care, and manufacturing and services. For more information on The Mercanti Group, please visit the website at www.mercantigroup.com, or contact them at 612.333.0130 (Minneapolis office) or 310.444.0130 (Los Angeles office).