Performance Sports Said Planning to Seek Bankruptcy With Rescueby
Sagard Capital, Brookfield and Fairfax to buy company’s debt
Bauer-skate maker said planning to file in Canada, Delaware
Performance Sports Group Ltd., the maker of Bauer and Easton brand sports equipment, plans to seek bankruptcy protection as early as Monday in Canada and Delaware with a rescue plan from its two largest holders, Sagard Capital Partners and Brookfield Asset Management Inc., a person familiar with the matter said.
Sagard, Brookfield and Canada’s Fairfax Financial Holdings Ltd. would repay the company’s $440 million in outstanding debt and contribute some additional operating funds through a debtor-in-possession loan, the person said. The total package is valued at more than $500 million, the person said.
A spokesperson for Brookfield declined to comment. Representatives for Performance Sports, Fairfax and Sagard weren’t immediately available for comment. The rescue proposal was reported earlier by the Globe and Mail newspaper in Toronto.
Exeter, New Hampshire-based Performance Sports traces its roots back to 1927 and the development of the first ice-skating boots with blades attached. The shares have fallen about 64 percent this year amid an investigation by U.S. and Canadian securities regulators. The company had delayed reporting its earnings amid an internal investigation.
The collapse of Performance Sports is, in part, the consequence of another bankruptcy. Retailer Sports Authority Inc., one of its largest customers, filed for Chapter 11 protection in March. Shortly after that, Performance Sports wrote down anticipated sales that it would have gotten from the chain and slashed its financial forecasts.
Specialty retailers of all sorts, including athletic-goods chains such as Sports Authority and Eastern Mountain Sports, have stumbled as consumers do more shopping online or at big-box stores.
In October, Brookfield and Sagard, a division of Power Corp. of Canada, said they had entered into an agreement to explore strategic alternatives for Performance Sports. Sagard Capital and Brookfield, through its subsidiary Brookfield Capital Partners, are the two largest shareholders in Performance Sports, collectively owning more than 30 percent of the company, according to data compiled by Bloomberg.
Earlier, Sagard said it had entered into a similar arrangement with Toronto-based Fairfax. Fairfax has no disclosed stake in Performance Sports, according to data compiled by Bloomberg.