By Thomas J. Ryan
Brookfield Asset Management Inc., the largest alternative-asset manager in Canada, is exploring a bid for Performance Sports Group Ltd. (PSG), according to a report from Bloomberg.
With the news released October 12 leading to heavy trading activity in its stock, the owner of Bauer, Easton and Maverik issued a statement indicating that no deal with any buyer had been finalized. The statement said that along with the assistance of its independent financial advisor, Centerview Partners LLC, it has held discussions with certain interested parties and stakeholders, but “no agreement has been reached with a third party.” The company also owns sports brands Mission, Cascade, Inaria and Combat.
On September 1, PSG confirmed that its board had formed a special committee of independent directors, which hired Centerview Partners as its independent financial adviser to assist “in the review and evaluation of strategic alternatives and in the company’s ongoing discussions with its lenders.”
The hiring signaled a potential sale of the company. In late August, former PSG Chairman Graeme Roustan indicated he was weighing a possible bid for the company, hiring Jefferies Group LLC and Canaccord Genuity to explore an offer.
In late September, Brookfield Asset Management raised its stake in Performance Sports from 10 percent to 13.2 percent after having said it would push for a restructuring and a possible sale. The asset manager is Performance Sports’ second largest shareholder after Sagard Capital Partners Management Corp.
The hiring of Centerview Partners came as PSG said creditors granted the company a 60-day extension, to October 28, to file its annual 10K report in order to avoid a default on its debt. The filing has been delayed due to an internal financial investigation. PSG is being investigated by U.S. and Canadian securities regulators.
PSG has faced a myriad of market pressures, including the bankruptcies of Sports Authority, Team Express and Total Hockey, a decline in diamond-sport sales and a weak Canadian dollar.
In mid-June, the company hired a new CEO, Harlan Kent, formerly of Yankee Candle, who has consolidated the company’s entire baseball/softball category under its existing Easton operations in Thousand Oaks, CA while closing two Combat brand facilities. In early August, PSG said it would reduce its workforce by 15 percent to support estimated annualized savings of $5.9 million. Sales are expected to decline 10 percent in both the fourth quarter and fiscal year ended May 31.
Photo courtesy PSG/Bauer
