Riddell parent sells off Easton brand to focus on football

Danny Ecker
CRAIN’S CHICAGO BUSINESS

Published: February 17, 2014 10:09 am ET
Updated: February 17, 2014 10:11 am ET

Related to this story

Topics Mergers & Acquisitions, Recreational/sporting goods

The parent company of Rosemont, Ill.-based helmet maker Riddell Inc. sold its baseball and softball business for $330 million, which it plans to plow into its football and action sports brands, the company announced.

In a deal that had been rumored for weeks, Van Nuys, Calif.-based Easton-Bell Sports sent the Easton baseball and softball brand to Exeter, N.H.-based Bauer Performance Sports Ltd. and is "working towards an agreement" with a separate entity to sell its Easton Hockey brand.

The news comes in the wake of a report that Easton-Bell's private-equity owner, New York-based Fenway Partners, couldn't find a buyer for the roughly $800 million company last year because of Riddell's mounting exposure to concussion related-lawsuits.

Riddell, which accounts for about a quarter of Easton-Bell's revenue, was named in some of the lawsuits that were part of last year's $765 million settlement between the National Football League and more than 4,000 former players over concussion-related claims filed against the league since early 2011. It still faces claims from hundreds of those plaintiffs.

Easton-Bell will rebrand itself BRG Sports once the sale clears, turning its focus to a family of brands that includes Riddell, Bell motor sports helmets and Giro and Blackburn cycling accessories.

'Terrific Opportunity'

Selling the Easton brands will "provide a terrific opportunity for us to focus on growing our core football and action sports brands and enhancing our cutting-edge, market-leading products, while simultaneously streamlining our operations and solidifying our financial strength," Easton-Bell Sports Executive Chairman and CEO Terry Lee said in a statement.

Getting more attention from its ownership couldn't come at a better time for Riddell, which recently lost its title as the official helmet of the National Football League.

While demand for more protective gear and higher price points for some products have driven the company's revenue up by more than 40 percent since 2009 to roughly $200 million a year, its rising costs have flattened profits over that span.

Having more resources dedicated to its brand could help the company negotiate its increasing expenses costs from concussion-related litigation and resulting higher insurance premiums, said Maura O'Hara, a private-equity expert at the Illinois Venture Capital Association.

When a private-equity firm sells off one piece of a company, "it becomes very easy to figure out whether you're being successful or not successful, and typically that drives better performance for the remaining brands," she said. "If you don't believe you can sell the entire entity for a price that will provide an adequate return on investment, then it makes sense to sell off what you can to return money to your partners, and then find a way to make the difficult part better."

Still, mitigating the risk of selling football helmets won't be easy to overcome, especially with dwindling participation in youth tackle football.

The number of kids playing tackle football ages 6 to 17 dropped almost 16 percent in 2013 from 2012, according to the Sports and Fitness Industry Association.


Comments

Riddell parent sells off Easton brand to focus on football

Danny Ecker
CRAIN’S CHICAGO BUSINESS

Published: February 17, 2014 10:09 am ET
Updated: February 17, 2014 10:11 am ET

Post Your Comments


Back to story


More stories

Image

New medical firm buys Clairson Plastics

September 19, 2014 4:33 pm ET

Custom injection molder Clairson Plastics is being sold to a new start-up that plans to dive into the medical market with a new dialyzer, a key...    More

Image

Hong Kong's TK eyes expansion, may buy Nypro Tool operation

September 19, 2014 2:49 pm ET

Hong Kong-based mold maker and plastics processor TK Group (Holdings) Ltd. said it's reached a tentative agreement to buy a tooling factory in...    More

Exo-s buys injection and blow molder in Mexico, expands footprint

September 19, 2014 2:15 pm ET

Custom molder Exo-s Inc. has bought an injection and blow molding operation in San Juan del Rio, Querétaro, Mexico.    More

Image

Bayer spinning off plastics business

September 18, 2014 8:49 am ET

Bayer AG will spin off its MaterialScience plastics group into a separate, publicly-traded company within the next 12 to 18 months.    More

Badger buys competitor Joseph Homa

September 17, 2014 4:04 pm ET

Badger Plug Co. has extended its protective plugs customer base by acquiring and closing a rival, Joseph Homa Consultants Inc. of Montreal.    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events