Marucci Sports, a maker of bats, gloves and other baseball equipment, is being sold to specialized bicycle and dirtbike suspension maker Fox Factory Holding Corp. in a deal valuing the business at $572 million.
“Fox’s enthusiast culture, coupled with its focus on driving growth through strong brands, highly engineered products and disruptive technologies fits well with our values and mission,” said Marucci co-founder and CEO Kurt Ainsworth in a statement announcing the deal Thursday.
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Marucci, a Louisiana-based company that boasts Albert Pujols, Anthony Rizzo and David Ortiz on its product advisory board, was bought in April 2020 by Compass Diversified, a publicly traded firm that buys and sells small to mid-sized niche businesses. It previously owned Fox Factory, having exited that business for more than $500 million a decade ago. Fox Factory, also publicly traded, focuses primarily on motor sports, producing performance parts—primarily suspensions—for ATVs, Jeeps, motorbikes and bicycles.
The headline price for Marucci is the enterprise value of the transaction, a figure that combines the cash being paid by Fox and the assumption of any debt on Marucci. The transaction locks in a healthy gain for Compass, which said it will book a $225 million to $245 million pre-tax gain on the sale. Compass paid $200 million for Marucci, according to a disclosure in 2020.
Compass noted that during the past three years Marucci expanded further into softball and fielding gloves as well as the acquisition of brands like wood bat maker Baum Bat and Lizard Skins, which makes grips for bikes, baseball bats and other stick and paddle sports.
Earlier this year, sports-focused mergers and acquisitions banker Joe Pellegrini of Baird cited Marucci as one of a series of mid-sized sports gear businesses that would be desired acquisition targets if put up for sale.
The deal was announced after the close of trading Thursday. Knee-jerk reaction from the lightly traded post-market trading session saw Fox Factory shares sold off more than 15%. However, Fox also released quarterly earnings results at the same time that reflected weaker revenue due to ramifications of the auto workers strike and a slowing bicycle market.
“The acquisition of Marucci combines two high-performance cultures, industry-leading brands and product portfolios that expand Fox’s enthusiast offering,” Fox stated in its Thursday earnings release.
Shares of Compass Diversified were up about 1% in Thursday evening trading.
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