Sadie Keljikian, Top Billion Finance
Performance Sports Group Ltd. has filed for bankruptcy protection in the US and Canada. The company announced that it was facilitating a restructuring and sale of nearly all of its assets on Monday morning.
Performance, maker of Bauer ice hockey gear, announced that it would auction its assets to reconcile its debt. The announcement, however, came after Performance had a deal to sell a majority of its assets to Brookfield Asset Management for just over $575 million. Brookfield, an investor group, is led by Sagard Capital and Fairfax Financial Holdings Ltd. Former Chairman of Performance Graeme Roustan said in August that he was working with investment banks to find a bid. On Friday, Reuters clarified by reporting that Performance would enter bankruptcy protection with a buyer in hand and would seek out higher bids.
It is important to note that Performance’s difficulties demonstrate a wider national trend. Recently, increased competition in North American sporting goods manufacturing presents numerous challenges to all domestically based members of the industry. Due to the industry’s recent turmoil, Sports Authority Holdings Inc. have taken some financial hits in recent months as well. The retailer filed for bankruptcy in March, triggering a $90 million loss of Performance Sports inventory, according to Wall Street Journal.
Performance listed both its assets and liabilities in the range of $500 million to $1 billion. The company listed both amounts in its voluntary petition filed under Chapter 11 in Delaware.
Despite the numerous complexities of this case, Performance claims that operations will continue as usual during the bankruptcy process. Brookfield and existing lenders will provide $386 million debtor-in-possession financing. Performance also announced management changes, President Amir Rosenthal and Executive Vice President Todd Harmon left on Friday. Furthermore, Dan Sills was named executive vice president of hockey, Mike Thorne is now executive vice president of baseball and softball, and Jennifer Hughey was named senior vice president in charge of supply chain management.
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