Performance Sports Group Acquires Easton Hockey
Innovative Hockey Brand Latest to Join Company's Premium High Performance Sports Portfolio
Performance Sports Group Ltd. (NYSE: PSG) (TSX: PSG) ("Performance Sports Group" or the "Company"), a leading developer and manufacturer of high performance sports equipment and apparel, today announced that it has acquired the Easton Hockey business from Easton Hockey Holdings, Inc.
The acquisition adds Easton Hockey's heritage of innovation to the Company's existing Bauer Hockey business, including intellectual property assets that will add to the Company's product lines under the EASTON and BAUER brands. In addition, the acquisition will provide the Company with exclusive control of the EASTON brand in all sports other than cycling and archery. The Company has owned the EASTON brand since the Company's April 2014 acquisition of the Easton Baseball/Softball business and has been licensing the use of the EASTON brand in the hockey, cycling and archery categories. The Company will continue to license the brand for use in cycling and archery.
"This is an exciting transaction for our company because it brings another business with a history of innovation to Performance Sports Group," said Amir Rosenthal, President, PSG Brands. "Easton Hockey was the pioneer of the aluminum and composite stick in hockey and EASTON has long been considered a strong brand in the sport. We believe by focusing on their track record of success in the stick category and by utilizing the resources of a broader and more financially stable organization, we can support and further grow the EASTON brand in this important category and other key equipment categories."
The acquisition includes all relevant patents, inventory, sale orders, accounts receivable and goodwill, and the assumption of certain liabilities related to the acquired assets. The seller will provide operational assistance to the Company pursuant to a transitional services agreement to assist with the integration of the Easton Hockey business. Within the first 12 months following closing, the Company currently expects that the Easton Hockey business will operate at approximately break-even EBITDA and will generate positive cash flow. In the third quarter of fiscal 2016, the Company also currently expects to record an accounting gain on bargain purchase due to the excess fair value of assets and liabilities acquired in excess of the purchase price. Further information regarding the acquisition can be found in the Company's quarterly report on Form 10-Q for the second fiscal quarter ended November 30, 2015.
About Performance Sports Group Ltd.
Performance Sports Group Ltd. (NYSE: PSG) (TSX: PSG) is a leading developer and manufacturer of ice hockey, roller hockey, lacrosse, baseball and softball sports equipment, as well as related apparel and soccer apparel. The Company is the global leader in hockey with the strongest and most recognized brand, and it holds the No. 1 North American position in baseball and softball. 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. Performance Sports Group is a member of the Russell 2000 and 3000 Indexes, as well as the S&P/TSX Composite Index. For more information on the Company, please visit www.PerformanceSportsGroup.com.
Caution Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of applicable securities laws including with respect to, among other things, supporting and growing the EASTON brand in the hockey stick category and other key equipment categories, that within the first 12 months following closing, the Easton Hockey business will operate at approximately break-even EBITDA and will generate positive cash flow and that the Company will record an accounting gain on bargain purchase in the fiscal third quarter of fiscal 2016 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 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 maintain and enhance brands, inability to introduce new and innovative products, intense competition in the sporting equipment and apparel industries, inability to own, enforce, defend and protect intellectual property rights worldwide, costs associated with potential lawsuits to enforce, defend or protect intellectual property rights, inability to protect our known brands and rights to use such brands, infringement of intellectual property rights of others, inability to translate booking orders into realized sales, including risks associated with changes in the mix or timing of orders placed by customers, seasonal fluctuations in our operating results and the trading price of our Common Shares, decrease in popularity of ice hockey, baseball and softball, roller hockey or lacrosse, reduced popularity of the National Hockey League, Major League Baseball or other professional or amateur leagues in sports in which our products are used, adverse publicity of athletes who use our products or the sports in which our products are used, inability to ensure third-party suppliers will meet quality and regulatory standards, reliance on third-party suppliers and manufacturers, disruption of distribution systems, loss of significant customers or suppliers, loss of key customers' business due to customer consolidation, change in the sales mix towards larger customers, cost of raw materials, shipping costs and other cost pressures, risks associated with doing business abroad, inability to expand into international market segments, inability to accurately forecast demand for products, inventory shrinkage, excess inventory due to inaccurate demand forecasts, product liability, warranty and recall claims, inability to successfully design products that satisfy testing protocols and standards established by testing and athletic governing bodies, inability to obtain and maintain necessary approvals in respect of products that may be considered medical devices, inability to successfully open and operate Own The Moment Hockey Experience retail stores, inability to successfully implement our strategic initiatives on anticipated timelines, including our profitability improvement initiative, risks associated with our third-party suppliers and manufacturers failing to manufacture products that comply with all applicable laws and regulations, inability to source merchandise profitably in the event new trade restrictions are imposed or existing trade restrictions become more burdensome, departure of senior executives or other key personnel with specialized market knowledge and technical skills, litigation, including certain class action lawsuits, employment or union-related disputes, disruption of information technology systems, including damages from computer viruses, unauthorized access, cyberattack and other security vulnerabilities, potential environmental liabilities, restrictive covenants in our credit facilities, increasing levels of indebtedness, inability to generate sufficient cash to fund operations or service the Company's indebtedness failure to make, integrate, and maintain new acquisitions, inability to realize growth opportunities or cost synergies that are anticipated to result from new acquisitions such as Easton Baseball/Softball, undisclosed liabilities acquired pursuant to recent acquisitions, volatility in the market price for Common Shares, possibility that we will need additional capital in the future, incurrence of additional expenses as a result of the loss of our foreign private issuer status, assertion that the acquisition of the Bauer Hockey Business at the time of the Canadian IPO was an inversion transaction, our current intention not to pay cash dividends, dependence on the performance of subsidiaries given the our status as a holding company, potential inability of investors to enforce judgments against the Company and its directors, fluctuations in the value of certain foreign currencies, including the Canadian dollar, in relation to the U.S. dollar, and other world currencies, general adverse economic and market conditions, changes government regulations, including tax laws and unanticipated tax liabilities and natural disasters and geo-political events, as well as the factors identified in the "Risk Factors" sections of the Company's annual report on Form 10-K and quarterly report on Form 10-Q for the second fiscal quarter ended November 30, 2015, which are available on EDGAR at www.sec.gov, on SEDAR at www.sedar.com, and on the Company's website at www.performancesportsgroup.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.