BRG Sports, a portfolio company of Fenway Partners, has entered into an agreement for publicly-traded Vista Outdoor to acquire the Action Sports business of BRG Sports for $400 million in cash plus an earn-out related to the future performance of the business.
BRG Sports is a designer, developer and marketer of sports equipment and accessories under the Bell, Riddell, Giro, Blackburn and C-Preme brands. The company was formerly known as Easton-Bell Sports and changed its name to BRG Sports in April 2014. BRG Sports is headquartered north of Santa Cruz in Scotts Valley, CA and has 32 locations in the US, Canada, Mexico, Europe and Asia (www.brgsports.com).
In the past two years, Fenway Partners has tried to sell BRG Sports in one piece but because of lawsuits and potential future liabilities related to its Riddell brand (football helmets) the firm has been marketing the company’s brands individually. The Action Sports business that is being sold to Vista Outdoor includes the Bell (motorcycling helmets), Giro (cycling and snowboarding helmets), Blackburn (cycling gear) and C-Preme (children’s helmets and products) brands.
BRG will apply the proceeds from the transaction with Vista to pay down debt, strengthen the company’s balance sheet and pursue growth initiatives that will benefit its remaining brand, Riddell. Riddell is a designer and developer of protective sports equipment including football helmets, shoulder pads, apparel, and related accessories (www.riddell.com). BRG Sports’ current owners, Fenway Partners – though its second and third funds – and Ontario Teachers’ Pension Plan (Teachers), will maintain their equity interests in the company.
Fenway Partners makes control investments in businesses with $100 million to $600 million in enterprise value and $15 million to $75 million in EBITDA. Equity investments generally range from $50 million to $75 million. The firm is based In New York (www.fenwaypartners.com).
Teachers is one of the world’s largest private equity investors, having participated as a long-term investor in numerous management buyouts in Canada, the United States and Europe. It is the private investment department of the Ontario Teachers’ Pension Plan, the largest single-profession pension plan in Canada. Teachers’ is based in Toronto with offices in New York and London (www.teachersprivatecapital.com).
Vista Outdoor (NYSE: VSTO) is a designer, manufacturer and marketer of products used in the outdoor sports and recreation markets. The company was the top seller of ammunition in the United States from 2008 to 2013. As of March 2015, it controlled about 40% of the ammunition market. The company is headquartered north of Salt Lake City in Clearfield, UT (www.vistaoutdoor.com).
Morgan Stanley (www.morganstanley.com) was the financial advisor to BRG Sports and Ropes & Gray provided legal counsel (www.ropesgray.com).
© 2016 PEPD • Private Equity’s Leading News Magazine • 2-29-16