In 2016, The M&A Train Kept Chugging Along

By Thomas J. Ryan

While the active lifestyle industry lacked many blockbuster deals, mergers & acquisitions continued at a steady clip in 2016.

Overall M&A activity in dollars appears to have declined because sporting goods’ mega-players with ample cash– Nike, Adidas, Under Armour, VF Corp., Wolverine Worldwide, Columbia Sportswear, etc. – all weren’t buying this year.

Indeed, the only mega-deal was Newell Brands’ acquisition of Jarden Corp. for $15 billion. While both conglomerates own a diverse range of household brands, Jarden owned Jarden Outdoor Solutions, a $2.7-billion business that includes 59 brands in the active space, including Coleman, Marmot, the Abu Garcia, Berkley and Shakespeare fishing brands, and Rawlings.

In early October, Newell Brands said it planned to sell about 10 percent of its portfolio, including the Winter Sports segment of Jarden Outdoor, including Marker, Dalbello, Line, Full Tilt and Madshus. Newell Brands also put Zoot, the triathlon brand, and Squadra, the specialist in custom cycling and triathlon apparel, on the selling block.

Still, although smaller in size, the industry again saw a wide number of deals, spurred on by cash reserves that remain at record highs at both strategic and private-equity buyers and overall interest in the active space. Much of the M&A action would be considered “tuck in” deals that helped the acquirer tap a new market or another level of scale, although some iconic brands found themselves in new hands.

Wilson Sporting Goods, which is owned by Amer Sports, bought the Louisville Slugger brand for $70 million from Hillerich & Bradsby, the family-owned business that has made the bats for more than 130 years. Wilson also acquired EvoShield, a leading provider of protective gear for baseball and softball. Also in the team space, Easton Hockey was sold to Performance Sports Group while Badger Sportswear was acquired by CCMP Capital Advisors. Mitchell & Ness was sold by Adidas to a private-equity firm.

BSN Sports acquired Lids Team Sports from Genesco Inc., along with a number of other dealers during the year, to build its dominant position in the team dealer channel.

In the hunt & fish space, Smith & Wesson acquired a number of brands – UST Brands, Crimson Trace and Taylor Brands – as it worked to diversify its business away from the politically charged guns & ammo category. Similarly, Vista Outdoor bought BRG Sports (Bell, Giro, Blackburn) as well as Camp Chef to diversify.

Among the active consolidators was Gildan Activewear, which acquired Peds Legwear and Alstyle Apparel while recently reaching an agreement to acquire American Apparel. Implus acquired FuelBelt and the Spenco insole business as it continues to consolidate the accessories space.

Bravo Sports Corp. acquired Nutcase, the urban helmet brand known for its colorful designs, as well as skateboard-manufacturer Sector 9. Helen of Troy entered the outdoor and athletic category with the buyout of Hydro Flask in a cash deal worth $210 million. Yeti, the trendy manufacturer of heavy-duty coolers and tumblers, filed for an initial public offering seeking a valuation of $5 billion, but has delayed its debut as a public company until 2017. Others taking the IPO route were Acushnet, the parent of Titleist, and Duluth Trading.

The fitness segment saw a jump in activity. Gym Source bought The Home Fitness Group, Nautilus acquired Octane Fitness, Brunswick Corp. swallowed Cybex and Johnson Health Tech acquired both 2nd Wind Exercise Equipment and Leisure Fitness to move the manufacturer into retail. That trend of brands going vertical into retail was also seen in August with Performance Bicycle selling to ASI, the parent of Fuji, Breezer, Kestrel, SE Bikes and other brands.

On the retail side, landing in bankruptcy court unfortunately became trendy. Sports Authority, Sport Chalet and Golfsmith were all unable to find a buyer and forced to liquidate. Pacific Sunwear, which filed for Chapter 11 protection in April, was able to exit largely intact through a sale to Golden Gate Capital. Total Hockey, which filed in July, was sold to competitor Pure Hockey. Team Express, which filed for bankruptcy protection in December 2015 and is the owner of Baseball Express, Softball.com and Football America, was snapped up by Concourse Sports, the owner of RedsGear.com, KnifeHog.com and SoftballFans.com.

A ton of  hype arrived with the IPOs of GoPro in 2014 and Fitbit in 2015, but both of those stocks significantly underperformed the market in the past year to snuff out much of the investor fervor around digital technologies in the active space. In early December, Fitbit acquired Pebble, one of the pioneers in the wearable space. Misfit was acquired earlier in the year by Fossil. With its stock tanking, GoPro has been floated around as prime for acquisition.

The coming year promises to be active again. One mega-deal, Bass Pro and Cabela’s, is already in the works. Performance Sports Group, the parent of Bauer, is on the selling block in bankruptcy court, while VF Corp. is exploring the sale of Majestic Athletic.

Below, a listing of the industry’s big and small acquisitions in 2016:

Lead photo courtesy Marmot