By Thomas J. Ryan
Graeme Roustan, the former chairman of Performance Sports Group Ltd. (PSG), is weighing a possible bid for the company, according to a report from Reuters. The move comes as the parent of Bauer and Easton baseball is scrambling to avoid a default.
Roustan said he had hired Jefferies Group LLC and Canaccord Genuity to explore an offer.
“Should there be an opportunity that becomes available through any kind of process, I’ll be the first in line to make an offer,” Roustan told Reuters. “I believe that my ownership involvement is not behind me.”
Performance Sports, formerly Bauer Performance Sports Ltd., was owned for about a decade by Nike Inc. before being sold to Roustan and Kohlberg & Co. in 2008. It went public in 2011. Roustan became chairman following Nike’s sale and resigned in 2012. He still holds around a 1.3 percent stake in Performance Sports.
In January, Roustan threatened to launch a proxy fight to secure a seat on the company’s board or take the company private at a premium to its stock price, then at $12.36. He had first approached PSG’s board to seek a seat in January 2015 and has particularly questioned the company’s opening of its own “Own the Moment” Bauer Hockey retail stores that he believes compete with wholesale accounts.
Since then, Performance Sports has endured a tumultuous year, which included the exit of its CEO, Kevin Davis, and other key executives, a number of board changes, and sizable restructuring activities amid steep shortfalls in its financial performance. In April, the company slashed its guidance for the year due to weak sales in its baseball segment. It also cited the impact of the Chapter 11 bankruptcy of U.S. retail chain Sports Authority. The weak Canadian dollar has also impacted results.
Last month, Performance Sports said it had accelerated its efforts to cut costs, including eliminating 15 percent of its work force, in an attempt to save as much as $5.9 million in salaries and benefits annually.
On August 15, Performance Sports said it expected to default on its loan because of delays in a financial filing caused by an unspecified internal investigation. Not filing the report by August 29 would put it in default, opening it up for possible creditor action. The company said two days later that it is under investigation by the U.S. Securities and Exchange Commission and Canadian authorities.
On August 23, Reuters reported the company has hired Centerview Partners Holdings, LLC to assist with debt negotiations.
Shares of PSG have lost half their value after news of the potential default arrived. On Friday, however, shares were up 63 cents, or 34.9 percent, to $2.43 in mid-day trading on reports that it was close to reaching an agreement extending its loan covenants.
The company owns the Bauer, Mission, Maverik, Cascade, Inaria, Combat and Easton brand names.
Photo courtesy Performance Sports Group/Bauer Hockey
