Adidas announced that it has entered into a definitive agreement to sell its CCM ice hockey brand to a newly formed affiliate of Birch Hill Equity Partners for a total consideration of US$110 million.
The majority of the payment will be made in cash with the remainder paid in the form of a secured note. The transaction, which is subject to customary closing conditions, is expected to be completed during the third quarter of 2017.
As a result of the transaction, Adidas has recorded a non-operational negative P&L impact in the high-double-digit million euro range, which will be reported in discontinued operations as part of the company’s second quarter 2017 results. The company’s continuing operations, however, are not affected by this one-time charge.
“CCM and its employees have made great contributions to our company. We have every confidence that the brand will continue to grow successfully under its new ownership,” said Kasper Rorsted, CEO of Adidas AG.
“The divestiture of CCM further reflects the commitment to our ‘Creating the New’ strategy, with complete focus on building on our strength in footwear and apparel via our Adidas and Reebok brands,” said Kasper Rorsted, Adidas CEO, in a statement. “The divestiture of CCM Hockey does not impact the company’s financial outlook for the current year. In addition, the strategic divestiture of the ice hockey brand has already been reflected in the company’s updated long-term outlook as provided in March 2017.”
The New York Post reported last week that a deal with Birch Hill Equity Partners was reached. In March, Adidas said it planned to sell the Canadian hockey gear brand as part of a company-wide reorganization.
Robert W. Baird & Co. acted as exclusive financial advisor to Adidas AG and Stikeman Elliott LLP served as lead legal counsel.
Photo courtesy CCM