Bauer Performance Sports Completes Acquisition of Easton
Baseball/Softball
Transformative Acquisition Adds No. 1 Market Share in
Baseball/Softball to Bauer Performance Sports Platform; Transaction
Expected to Be Accretive to Adjusted Earnings per Share in First
Year
EXETER, NH--(Marketwired - Apr 15, 2014) - Bauer
Performance Sports Ltd. (TSX: BAU) ("BPS" or the "Company"), a
leading designer and manufacturer of high performance sports
equipment and apparel, has completed the acquisition of the Easton
Baseball/Softball business from Easton-Bell Sports.
Under the terms of the asset purchase agreement, BPS acquired
Easton Baseball/Softball for a total all-cash consideration valued
at US $330 million, plus a working capital adjustment and
fees. BPS expects the acquisition to be accretive to Adjusted
Earnings per Share in the first year of ownership.
As the world's leading and most iconic brand in diamond sports,
the acquisition of Easton Baseball/Softball strengthens and
complements the other brands across the BPS platform, which
includes BAUER, MISSION, MAVERIK, CASCADE, INARIA and COMBAT. By
adding Easton Baseball/Softball to its portfolio, BPS now has a
stronger and more consistent revenue stream throughout its fiscal
year. This strategic acquisition also contributes
highly-valuable intellectual property to the Company's extensive
performance sports intellectual property portfolio.
"This is the largest and most transformational acquisition in
our history because it positions BPS as the No. 1 global leader in
ice hockey, roller hockey, baseball and softball," said Kevin
Davis, President and CEO of BPS. "Both companies have a passion to
elevate player performance and deliver innovation across every
category, and together we will be able to share technologies,
leverage our platform and continue growing the EASTON brand around
the world."
On a pro forma basis, the combined companies generated
approximately US $593 million in annualized sales and US $95
million in Adjusted EBITDA (based on the trailing 12-months at
December 31, 2013 for Easton Baseball/Softball and February 28,
2014 for BPS). This does not take into account the anticipated
operational synergies and efficiencies of the integrated
businesses.
While BPS now owns the EASTON brand and the Easton
Baseball/Softball business, Easton-Bell Sports retains Easton
Hockey and Easton Cycling. BPS has entered into a license agreement
that allows Easton-Bell Sports to continue to use the EASTON name
in these two sports segments. No other businesses from the
Easton-Bell Sports portfolio were included in the acquisition.
BPS will continue to operate the Easton Baseball/Softball
business out of its existing Van Nuys, Calif. and Salt Lake City,
Utah locations. Easton Baseball/Softball's key leadership team has
joined BPS with the exception of its president, who is assisting
with the transition, and will leave afterwards to pursue other
interests. Cliff Hall will serve as the Executive Vice
President of Easton Baseball/Softball.
"The team at Easton Baseball and Softball has built a winning
record since the launch of its first aluminum bat in 1972," said
Hall. "The acquisition by BPS will build on Easton Baseball
and Softball's tradition of developing game-changing technologies
that has positioned it as the world's leading and most recognized
brand in diamond sports. We are excited about the opportunities
ahead as we look to further invest across our product categories
and grow our brand."
Transaction Financing BPS financed the acquisition, as well as
refinanced certain existing indebtedness, with a US $200 million
asset-backed revolving credit facility and the issuance of US $450
million in senior secured loans.
The Company is considering options to reduce its leverage,
including repaying a portion of the senior secured loans with the
proceeds of public or private offerings of equity securities,
although this is dependent upon these options being available on
acceptable terms.
About Bauer Performance Sports Ltd. Bauer Performance Sports
Ltd. (TSX: BAU) is a leading developer and manufacturer of ice
hockey, roller hockey, lacrosse, baseball and softball sports
equipment, as well as related apparel. The Company has the
most recognized and strongest brands in ice hockey, roller hockey,
baseball and softball, and holds the top global market share
positions in these sports. Its products are marketed under the
BAUER, MISSION, MAVERIK, CASCADE, INARIA, COMBAT and EASTON brand
names and are distributed by sales representatives and independent
distributors throughout the world. The Company is focused on
building its leadership position by growing market share in all
product categories and pursuing strategic acquisitions. For more
information, visit www.bauerperformancesports.com.
Non-IFRS Measures This press release uses the following non-IFRS
measures: EBITDA and Adjusted EBITDA, Adjusted Earnings per Share
and Adjusted Net Income/Loss. The foregoing non-IFRS measures are
defined as follows: Adjusted EBITDA is defined as EBITDA (net
income adjusted for income tax expense, depreciation and
amortization, losses related to amendments to the credit facility,
gain or loss on disposal of fixed assets, net interest expense,
deferred financing fees, unrealized gains/losses on derivative
instruments, and realized and unrealized gains/losses related to
foreign exchange revaluation) before restructuring and other
one-time or non-cash charges associated with acquisitions, other
one-time or non-cash items, pre-initial public offering sponsor
fees, costs related to share offerings, as well as share-based
payment expenses. Adjusted Earnings per Share is defined as
Adjusted Net Income/Loss divided by the weighted average diluted
shares outstanding. Adjusted Net Income/Loss is defined as net
income adjusted for all unrealized gains/losses related to
derivative instruments and unrealized gains/losses related to
foreign exchange revaluation, non-cash or incremental charges
associated with acquisitions, amortization of acquisition-related
intangible assets for acquisitions since the Company's initial
public offering, costs related to share offerings, share-based
compensation expense and other non-cash or one-time items.
The Company believes that these non-IFRS measures provide useful
information to both management and investors in measuring financial
performance. These measures do not have a standard meaning
prescribed by IFRS and therefore, they may not be comparable to
similarly titled measures presented by other publicly traded
companies, and should not be construed as an alternative to other
financial measures determined in accordance with IFRS. These
non-IFRS measures are provided as additional information to
complement IFRS measures by providing further understanding of
operations from management's perspective. Accordingly, non-IFRS
measures should never be considered in isolation nor as a
substitute to using net income as a measure of profitability or as
alternative to the IFRS consolidated statements of income or other
IFRS statements.
Forward-Looking Statements
There can be no assurance that an equity offering will be
undertaken or completed in whole or in part or the timing of any
such transaction. No securities will be offered or sold in the
United States or to U.S. persons absent registration under the U.S.
Securities Act of 1933 or the availability of an applicable
exemption from such registration. This press release does not
constitute a solicitation of an offer to purchase, or an offer to
sell, securities in the United States or elsewhere.
This press release includes forward-looking statements within
the meaning of applicable securities laws, including with respect
to the acquisition of Easton Baseball/Softball being accretive to
Adjusted Earnings per Share in the first year of ownership, the
anticipated benefits of such acquisition, including, among others,
potential revenue growth, increased baseball/softball market share,
the timing and scope of anticipated synergies and operational
efficiencies, the effective acquisition multiple and accretion
(which may be impacted by the offering price of any private or
public equity offering and other final financing arrangements), the
availability of any private or public equity offering, expectations
regarding a stronger and more consistent revenue stream throughout
the Company's fiscal year, the successful expansion of the Easton
Baseball/Softball brand and the continued development of
technological advancements and innovation.
The pro forma information set forth in this press release should
not be considered to be what the actual financial position or other
results of operations would have necessarily been had the Company
and Easton Baseball/Softball operated as a single combined company,
as, at, or for the periods stated.
Forward-looking statements relate to analyses and other
information that are based on forecasts of future results and
estimates of amounts not yet determinable. The words "may", "will",
"would", "should", "could", "expects", "plans", "intends",
"trends", "indications", "anticipates", "believes", "estimates",
"predicts", "likely" or "potential" or the negative or other
variations of these words or other comparable words or phrases, are
intended to identify forward-looking statements. Forward-looking
statements, by their nature, are based on assumptions, including
those described herein and are subject to important risks and
uncertainties. Many factors could cause the combined Company's
actual results to differ materially from those expressed or implied
by the forward-looking statements, including, without limitation,
the following factors: inability to introduce new and innovative
products, intense competition in the equipment and apparel
industries, inability to introduce technical innovation, inability
to protect worldwide intellectual property rights and related
litigation, inability to successfully integrate acquisitions,
decrease in ice hockey, roller hockey, lacrosse and/or
baseball/softball participation rates, adverse publicity, reduction
in popularity of the NHL, NLL, MLB and other professional leagues
in which our products are used, inability to maintain and enhance
brands, reliance on third party suppliers and manufacturers,
disruption of distribution chain or loss of significant customers
or suppliers, cost of raw materials and shipping freight and other
cost pressures, a change in the mix or timing of orders placed by
customers, inability to forecast demand for products, inventory
shrinkage or excess inventory, product liability claims and
lawsuits, product recalls, compliance with standards of testing and
athletic governing bodies, departure of senior executives or other
key personnel, litigation and related matters, employment or union
related matters, fluctuations in the value of certain foreign
currencies in relation to the US dollar, inability to manage
foreign exchange derivative instruments, general economic and
market conditions, changes in consumer preferences and the
difficulty in anticipating or forecasting those changes, natural
disasters, as well as the factors identified in the "Risk Factors"
section of the Company's MD&A for the third quarter of fiscal
2014 and the Annual Information Form dated August 27, 2013, both of
which are available on SEDAR at www.sedar.com.
Furthermore, unless otherwise stated, the forward-looking
statements contained in this press release are made as of the date
of this press release, and we have no intention and undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
Company Contact: Amir Rosenthal Chief Financial Officer Tel
1-603-610-5802 Email Contact Investor Relations: Liolios Group Inc.
Scott Liolios or Cody Slach Tel 1-949-574-3860 Email Contact Media
Contact: Tory Mazzola Global Communications Manager Tel
1-603-430-2111 Email Contact
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