Fenway bolsters sporting goods platform

Fenway Partners has built out its Riddell Bell Holdings sporting goods platform, acquiring baseball bat and hockey stick maker Easton Sports in a transaction valued at $400 million (€334 million). Teachers’ Private Capital is joining Fenway in the deal, and will gain a significant minority stake in the business as part of its investment.

Fenway started the platform in May 2003, when it acquired Riddell, a manufacturer of football helmets and other related sporting gear. The New York-based firm bought the company from Lincolnshire Management in a roughly $100 million deal. Fenway then added bicycle-helmet maker Bell Sports to the platform the following summer through a $240 million buyout.

Including this latest Easton acquisition, the combined company will generate annual revenues in the range of $600 million.

Mark Genender, a managing director at Fenway, told PEO that Easton has been on Fenway’s radar for some time now. “Back in the late 1990s we had some discussions with Easton Sports,” he said, adding that “the existing relationship [with Easton] was a key factor to this deal”.

Jim Easton, the owner and chairman of Easton Sports, is rolling over a significant equity commitment into the new combined company.

Meanwhile, Fenway Partners’ total equity commitment in the platform now stands at slightly more than $100 million, according to Genender. The firm originally invested $69 million in the 2003 Riddell acquisition, and has made subsequent investments with each new deal. Mezzanine provider York Street Capital Partners also holds a stake in the equity.

Teachers’ Private Capital, the private equity arm of the Ontario Teachers’ Pension Plan, is the capital sponsor of York Street, although the two entities are investing separately in the company. York Street made its initial investment as part of the Bell Sports acquisition, while Teachers’ is joining the investor group as part of the Easton deal.

Easton received financial advice from Wachovia Securities and Goldman Sachs & Co. advised the buyers. The two banks are also serving as joint bookrunners for a new $415 million senior credit facility that will be partially used to fund the acquisition and will also go toward the refinancing of existing debt.

Ropes & Gray served as legal counsel to the buyers, while Latham & Watkins advised Easton.

The investment is coming out of Fenway’s second fund, the $909 million Fenway Partners Capital Fund II LP, which was raised in 1999. The firm is currently in the process of marketing its third fund, although Genender could not comment on the new vehicle.

The Easton acquisition is expected to close in the first quarter.