(Nov. 1, 2016) - The latest chapter in a tumultuous period for Performance Sports Group saw the parent company of Bauer Hockey and Easton baseball and softball declare bankruptcy on Oct. 31 in federal court in Delaware and a court in Canada. PSG entered into a "stalking horse" bid of $575 million with an affiliate of Sagard Capital Partners and Fairfax Financial Holdings Limited.
That bid sets the minimum acceptable bid for a court-supervised auction. Sagard is PSG's largest shareholder at 16.9%.
PSG also secured $386 million in bankruptcy loans to meet continued operational expenses and payment to employees. PSG's bankruptcy petition listed $594 million in assets and $608 million in debts.
PSG cited "a significant downturn in retail sales across all product categories, but particularly in the company's important bat category," the bankruptcies of Sports Authority, Total Hockey and Baseball Express and the consolidation of U.S. hockey retailers as reasons for its financial difficulties.
"The agreement we have reached with Sagard Capital and Fairfax Financial is a testament to their confidence in the future of our business and all of our great brands," said Harlan Kent, CEO of PSG, in a company-issued statement. "We believe that pursuing a sale through a court-supervised restructuring process represents the best path forward for our customers, vendors, retail and business partners, employees and other stakeholders.
"While the sale process is underway, our employees will remain focused on serving our customers and consumers and delivering our industry leading products and brands. Our on-hand inventories, and normal procurement activities to date, position us well to fulfill customers' orders. With new financing from Sagard Capital, Fairfax Financial and our lenders, we will have adequate liquidity to fund our ongoing operations."
Paul Desmarais III, the Executive Chairman of Sagard, said in the statement: "Performance Sports Group owns some of the most iconic, innovative and valuable brands in sports. Our plan provides financial stability to PSG to ensure that it can maintain operations and serve customers and retail partners throughout the court process."