The Toronto-based holding company Fairfax Financial Holdings agreed to acquire an equity interest in Peak Achievement Athletics Inc., which owns Bauer Hockey.Lawrence Scott/Getty Images
Fairfax Financial Holdings Ltd. FFH-T is taking control of the biggest name in hockey equipment.
The Toronto-based holding company agreed Monday to acquire an equity interest in Peak Achievement Athletics Inc., which owns Bauer Hockey, from Sagard Holdings Inc. Fairfax already owns part of Peak, but buying out Sagard’s position will give Fairfax direct control of the company.
Fairfax did not respond to a request for comment on the size of its stake in Bauer either before or after the Sagard transaction, though according to its 2023 annual report, it held 43 per cent of Peak Achievement as of Dec. 31, 2023, which listed the market value of its stake as being US$226-million.
Fairfax paid US$154-million for its stake in Peak in 2017 and has since received US$72-million in dividends, the report said.
Fairfax and Sagard, which is controlled by Canada’s wealthy Desmarais family, joined forces in 2016 to acquire Bauer’s parent company out of bankruptcy for US$575-million.
While financial terms of the transaction were not disclosed, The Globe and Mail reported in August that Fairfax and Sagard were looking to sell Bauer for roughly US$800-million. Bauer’s earnings before interest, taxes, depreciation and amortization (EBITDA) is just more than US$100-million annually, a source involved in the sale process told The Globe at the time.
The Globe is not naming the source because they were not permitted to publicly comment for their employer.
Bauer spokesperson Tory Mazzola declined to comment.
Bauer has controlled more than half of the North American hockey equipment market for years, with some estimates ranging as high as 60 per cent, and the vast majority of National Hockey League players use Bauer skates, according to NHL management estimates.
Montreal-based CCM Hockey, Bauer’s chief rival, has been up for sale since April. CCM has been owned by Birch Hill Equity Partners since 2017, when the Toronto-based private-equity fund manager acquired the gear maker from Adidas for US$110-million.
Bauer traces its roots back nearly a century to Kitchener, Ont., where it was first established as part of the Bauer family-owned Western Shoe Company in 1927. Bauer is widely credited with being the first company to manufacture skates where the blade was directly attached to a boot. Today, the company also produces lacrosse equipment and is based in Exeter, N.H., in the United States.
Bauer was acquired by Nike Inc. in 1994 for US$395-million and remained part of its athletics empire until 2008, when it was sold in a US$200-million cash deal to private-equity investor Kohlberg & Company and Quebec businessman W. Graeme Roustan. Mr. Roustan served as chair of Bauer’s board of directors until shortly after the company went public in 2011, raising $75-million at a $375-million valuation.
The company was delisted from the Toronto Stock Exchange and the New York Stock Exchange in 2016 after filing for bankruptcy protection in both Canada and the U.S. In court filings at the time, Bauer said it had accrued roughly US$607-million in debt to finance a string of acquisitions, but that its assets were worth just US$594-million.
Sagard controlled 17 per cent of the company’s stock when it first partnered with Fairfax to rescue the business in 2016.
For decades, Fairfax has focused primarily on investing in insurance providers around the world. Yet since buying its initial stake in Bauer, the company founded and led by Canadian billionaire Prem Watsa has spent billions of dollars acquiring other purveyors of various consumer goods.
In 2018, Fairfax paid $300-million for Toys “R” Us and Babies “R” Us Canada before selling the retail business of the firms in 2021 while keeping the real-estate assets. In 2022, Fairfax took the parent company of restaurant chains Swiss Chalet, Harvey’s and The Keg private in a deal valuing Recipe Unlimited at $1.2-billion. Most recently, Fairfax agreed to pay $1.7-billion earlier this year to acquire mattress and bedding retailer Sleep Country Canada Holdings Inc.