Performance Sports files for bankruptcy, rescue deal on table: Reuters

Performance Sports Group Ltd, the maker of Bauer ice hockey gear, said on Monday it has filed for bankruptcy protection in the United States and Canada to facilitate a restructuring and sale of almost all of its assets.

The company listed assets in the range of US$500 million to US$1 billion, and liabilities of US$500 million to US$1 billion, in its voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware.

Performance Sports, which was formerly owned by Nike Inc, said it has begun proceedings under the Companies’ Creditors Arrangement Act in Canada’s Ontario Superior Court of Justice.

The company, which also makes baseball bats and other sports equipment, said it would put its assets up for auction but already had a deal to sell nearly all of them for US$575 million to an investor group led by Sagard Capital, its biggest shareholder, and Fairfax Financial Holdings. The investors will also serve as “stalking horse” bidders through the restructuring process.

The company said it expects operations to continue uninterrupted during the bankruptcy process, through a US$386 million debtor-in-possession financing provided by existing lenders and the investor group.

Performance Sports was preparing to file for bankruptcy as it faced a deadline to turn in its annual financial statements to its lenders after receiving a 60-day extension this summer, Reuters reported on Friday, citing people familiar with the matter.

Performance Sports’ troubles highlight the challenges North American manufacturers face in the highly competitive sporting goods market. Sports Authority Inc, a U.S. sporting goods retailer, also filed for bankruptcy earlier this year.

Former Performance Sports’ Chairman Graeme Roustan told Reuters in August that he was working with investment banks to explore a bid for the company.

Performance Sports also announced management changes. President Amir Rosenthal and Executive Vice President Todd Harman left on Friday. Dan Sills was named executive vice president, hockey, and Mike Thorne was appointed executive vice president, baseball-softball.

Jennifer Hughey was named senior vice president, supply chain.

Update: Sagard Capital, an affiliate of Canada’s Power Corp, said last week it was in consultations with both Fairfax and Brookfield Asset Managment‘s private equity group about a potential deal involving Performance Sports.

(Additional reporting by Ismail Shakil in Bengaluru; Editing by Lisa Von Ahn)

(This story has been edited by Kirk Falconer, editor of PE Hub Canada)

Photo courtesy of Reuters/Brian Snyder