Athletic gear manufacturer Performance Sports Group, filed for bankruptcy, making it the latest sports-related retailer to fall on hard times.
A leading developer and manufacturer of high performance sports equipment and apparel for hockey, lacrosse, baseball and softball, Performance Sports Group said Monday that the voluntary Chapter 11 filing was necessary in order to facilitate financial and corporate restructuring.
The company has entered into an asset purchase agreement—meaning it would be co-owned by an affiliate of Sagard Capital Partners and Fairfax Financial Holdings, which together, would acquire nearly all of Performance Sports’ assets and its subsidiaries for $575 million, a floor price for a bankruptcy auction.
Performance Sports, which operates brands including Bauer, Mission, Combat and Easton, is hoping for a bid by January. Proceedings from the deal are expected cover the company’s outstanding debts, and the buyer would assume operating liabilities.
Securities regulators had started to look into Performance Sports’ finances after the company didn’t file audited financial reports for the year ended May 31.
The Sports Authority bankruptcy played a role in Performance Sports’ present state, according to The Wall Street Journal, as its liquidation left the company with a considerable unpaid bill. Performance Sports, however, expects its own fate to be better than Sports Authority’s.
“We believe that a sale together with an auction process under court supervision is in the best interests of Performance Sports Group and will maximize value for our stakeholders when compared to other alternatives,” Performance Group chairman Bernard McDonell said. “In light of our inability to file our annual audited financial statements and the resulting default under our secured loan agreements, we believe that today’s action is the responsible course to take for Performance Sports Group to address its financial, legal and regulatory challenges under supervision of the courts.”
Performance Sports said it expects its operations to continue uninterrupted and that obligations to employees, suppliers and customers will still be met.