Fox Factory Holding Corp. in a regulatory filing revealed that it booked a loss of $120 million on the sale of the Marucci to a management-led buyout and that the baseball business had been losing money. Analysts still saw the sale as a likely positive development for Fox Factory.
As reported, Fox Factory said late Friday that it completed the sale of Marucci Sports LLC, to Squared Up Holdings, LLC, an investor group led by Kurt Ainsworth, Marucci ‘s CEO, for $225 million, well below the $572 million it paid for the baseball bat and glove business in 2023. The transaction concluded a review of strategic alternatives for Marucci begun February 2026. Marucci’s brands include Marucci, Victus, Baum, and Lizard Skins.
In its 8-K filing with the Securities & Exchange Commission, Fox Factory noted that the $225 million sales price compared to $337.6 million in net assets of the business, yielding a booking loss after transaction costs of $120.1 million.
Other details in the filing include the Marucci business showing a $12.7 million GAAP operating loss in the first half of 2026 on sales of $79.2 million. In 2025, Marucci posted a GAAP operating loss of $5.8 million on sales of $186.4 million.
On a pro-forma basis, Fox Factory said its balance sheet now carries $144.9 million in intangible assets and $49.3 million in goodwill, with the sale removing $232.0 million in intangibles and $34.3 million in goodwill.
Fox Factory said Marucci does not qualify as discontinued operations and it has no plans to restate financials.
In a note issued Tuesday, September 29, Peter McGoldrick, at Stifel, again reiterated his “Buy” rating on Fox Factory at a $25 price target, believing the sale will help the company focus on its “ride dynamics core ”covering powered vehicles, bikes and aftermarket components. Its bike products include the Fox, Marzocchi, RaceFace, Easton and RideConcepts brands.
McGoldrick wrote in a note, “Marucci was losing money on a GAAP basis when the company badly needed cash flow and profitability, so the 8-K emboldens our favorable view of the divestiture. Disclosure directionally validates our assessment of the $1.3bn pro forma business with capacity for margin expansion and modest growth. We remain convinced that the streamlined brand portfolio, net leverage profile below 3.0x, incremental interest savings, and capacity for cash generation to accrue to equity holders is undervalued in the deeply discounted multiple.”
In his initial note following the sale, McGoldrick described the sale as “the most significant step in FOXF’s transformation, removing an underperforming unrelated business, enabling focus on the ride dynamics core, while driving $16mn interest expense savings. We view the sale favorably and expect the cleaner story will expand the investor audience (improved risk profile, more cohesive operations).”
In a note following news of the sale, Anna Glaessgen, at B. Riley, reiterated her “Neutral” rating at a price target of $20.
She wrote in a note, “The Marucci acquisition has been a pressure point on sentiment since announced (and was contemplated in our November 2023 downgrade), considering limited synergy with the legacy business and a steep price (largest acquisition in company history), which hasn’t been helped by underperformance vs. initial projections, albeit partly reflective of items out of management’s control like tariff hikes (Marucci faced outsized exposure given aluminum bat sourcing from China).”
Glaessgen believes the discounted selling price versus what Fox Factory paid for the business “will likely weigh on investor confidence in M&A as a positive catalyst for FOXF.” However, she believes exiting the Marucci business is “in line with investor expectations,” as Fox Factory’s EBITDA has declined over the past few years and its shares have re-based significantly lower.
Glaessgen added that while Marucci wasn’t the “sole cause of valuation compression” in recent years, she sees the sale as a “step toward alleviating the sentiment overhang, while also offering a more palatable leverage profile (from 3.7x to 2.7x PF for 2Q26) and lessening business complexity.”
She concluded, “That said, we continue to see improved performance in the legacy business as the more important hurdle to clear from a stock recovery perspective, with 4Q in particular representing a key proof point considering the significant margin ramp needed to hit 2026 guidance.”
Image courtesy of Marucci Sports
