Publicly-traded Compass Diversified Holdings has agreed to acquire Marucci Sports for $200 million.
Marucci Sports is a manufacturer and distributor of baseball and softball equipment including wood and metal bats, apparel, batting and fielding gloves, and bags and protective gear. Company-owned brand names include Marucci and Victus (acquired in February 2017) and the company’s major league partners include Albert Pujols, Anthony Rizzo, Buster Posey, David Ortiz and Jose Bautista. According to the company, Marucci and Victus bats are the top two most-used bats in major league baseball.
The Baton Rouge, Louisiana-based company, with 230 employees, was founded in 2009 by CEO Kurt Ainsworth (a former pitcher with the San Francisco Giants and Baltimore Orioles), Joe Lawrence (a former shortstop with the Toronto Blue Jays), and Reed Dickens (an active private investor). The company’s first transaction was the buy of Marucci Bat Co., which was founded by LSU athletic trainer Jack Marucci, in 2004.
For the trailing twelve months ending December 2019, Marucci Sports had approximately $14 million to $15 million of adjusted EBITDA. With a purchase price of $200 million, this equals an adjusted EBITDA valuation multiple of 14.3x to 13.3x.
“We are pleased to add Marucci Sports to our portfolio of niche market-leading brands,” said Elias Sabo, CEO of Compass. “With an unwavering commitment to quality craftsmanship and focus on addressing players’ evolving needs, Marucci has firmly established itself as a leader in baseball equipment, and we are confident that together we will further expand Marucci’s best-in-class product portfolio, penetrate new markets, and increase the brand’s presence internationally.”
Compass Diversified (NYSE: CODI) is a private equity firm specializing in acquisitions, buyouts, and middle-market investments. The firm invests between $75 million and $700 million in companies that have EBITDA of at least $10 million. Sectors of interest include niche industrial or branded consumer companies that are headquartered in North America. Compass went public in 2006 and is based in Westport, Connecticut.
“When we launched Marucci Sports, our goal was to offer all players, regardless of age or level, big-league quality products that they wanted and needed to be successful,” said Mr. Ainsworth. “This partnership with Compass represents the beginning of a long-term relationship that recognizes the tremendous efforts and hard work of the Marucci team and demonstrates the high growth potential of our impressive suite of products. We look forward to working with Elias and the Compass team as we leverage their substantial expertise in the branded consumer products space and permanent capital base to achieve our shared objectives.”
Post-closing, which is expected by the end of April, Compass will own approximately 95% of Marucci with existing stakeholders in the company holding the balance. Mr. Ainsworth and other members of the senior management team will continue to lead the company.
Jefferies was the financial advisor to Marucci on this transaction.
A copy of Compass Diversfied’s March 2020 8-K filing with the SEC, which includes a copy of the Marucci purchase agreement, is available HERE.
© 2020 Private Equity Professional | March 12, 2020
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