Sagard, Fairfax lead bidding for Performance Sports in court-supervised auction

EXETER, N.H. – A pair of big Canadian investors are proposing to buy Performance Sports Group Ltd. (TSX:PSG), the maker of Bauer hockey skates and other sports equipment, for US$575 million through a court-supervised restructuring.

The sale process will be overseen by a bankruptcy court in Delaware and the Ontario Superior Court under Chapter 11 proceedings in the U.S. and the Companies’ Creditors Arrangement Act in Canada.

Performance Sports said its largest shareholder, Power Corp.’s Sagard Capital Partners and Fairfax Financial Holdings Inc. (TSX:FFH) are making the “stalking horse” bid to set a minimum price for PSG’s assets.

It says a final sale will be the result of a court-supervised auction. The successful bid is expected to be selected in the first quarter of next year, subject to regulatory approvals and other conditions.

Performance Sports — which ran into financial difficulty after a major U.S. retailer sought bankruptcy protection last spring — said it has lined up US$386 million in financing provisions to fund its ongoing operations and the restructuring process.

The company — headquartered in Exeter, N.H. — said it will continue to meet its day-to-day obligations to its employees, suppliers and customers during the restructuring process.

Sagard — part of the Montreal-based Power group that includes Great-West Life and IGM Financial — owns 16.9 per cent of Performance Sports.

Last week, Sagard announced confidentiality agreements with Brookfield Capital Partners, part of Toronto-based Brookfield Asset Management (TSX:BAM.A), which holds about 13.2 per cent, and with Fairfax — which didn’t have any equity investment in PSG.

Performance Sports announced in August that it was unable to file an 2016 audited annual report with regulators on time. Its lenders gave the company until Oct. 28 to file its 2016 annual report and its report for the first quarter of its 2017 financial year.