Nike sale of Bauer confirmed

[icingboy 0]

bad deal for Nike, 12 years of mistakes omming to an end!

DOW JONES NEWSWIRES

Nike Inc. (NKE) agreed to sell its Bauer Hockey unit to an investment group led by Kohlberg & Co. and Canadian businessman W. Graeme Roustan for $200 million.

In September, Nike said it was exploring the sale of the unit following a business review that showed the brand doesn't "align with the company's long- term growth priorities."

Nike's shares dropped in the pre-market.

"We're pleased to have reached an agreement for Bauer with strategic buyers who have a passion for hockey and are committed to continue to invest in Bauer's long-term growth and brand leadership," said Nike Chief Executive Mark Parker. " Nike Bauer Hockey has been part of the Nike family for 12 years, and its team has done an incredible job. Selling this great hockey company was a tough decision but one that was in the best interests of Nike and Bauer as we each look to maximize our respective growth opportunities."

In the release, Nike described Bauer as "hockey's leading manufacturer." In 1927 it developed the first skate with the blade attached to the boot.

Under the terms of the deal, Bauer will continue to use the Nike Bauer Hockey trademark on existing products for a period of up to two years.

Nike's shares closed Wednesday at $61.20. Shares recently changed hands at $ 58.

-By Andrew Edwards, Dow Jones Newswires; 201-938-5973; Andrew.Edwards@ dowjones.com

[lampliter87 8]

a canadian bought the company, eh?... hopefully that will be a good thing

does anyone have any info on this guy or the company (Kohlberg)?

[Clark12 0]

I can't wait for the return of Bauer branded products. I felt dirty wearing something with the Nike 'swoosh' on it! :lol:

[BobMcRobertson 0]

http://www.kohlberg.com/

From what I, in my non-business sense mind, have gathered is they probably financed a lot of the deal. Not sure, hopefully someone with some business learnin can educate me.

http://www.roustan.com/graeme_roustan.html

But this Roustan guy sounds promising.... good hockey background and stuff. That Equikids program is just down the road from where I work. Owns arena/ice rink support companies and a rink in Johnstown, PA. Any MSH folks play there?

[number21 3]

BobMc beat me to it.

[shooter27 117]

Kohlberg was founded by one of the founding partners of KKR (Kohlberg, Kravis, Robert). One of the largest leveraged buy-out shops in the world. KKR came to fame during the corporate greed era in the '80s. Most famously, they were the ones who engineered the take-private transaction of RJR Nabisco which, up until last year, was the largest LBO in history.

This Kohlberg guy is most likely a billionaire many times over. In fact, from looking at their website I would not be surprised if Kohlberg & Co LLC's largest investor was Kohlberg himself.

[icingboy 0]

Greed is good for company owners, not customers,

My bet for Bauer Future

Less money in sponsor deals and team free stuff, Nike has been a problem for other companies putting prices for team contracts to ridiculous amounts, this will of course not be the case for new owners

Less R&D spending,

To make more money come out, less quality on the goods, this for a brand that allready is suffering qualiy problems, this can be a fun ride!

Finally, my guess, in 3 years time, sale will have droppet so much that they will launch new modell called XXXXXX with wings and MP3 Player,

And after 5 years, Easton takes over and makes it a low end brand for mass market, not a pro brand anymore!

[Havok19 0]

Have faith.The only thing that is bothering me is that Nike (love them or hate them) where always in the front for R & D with their deep pocket.Time will tell.

[lampliter87 8]

whoah i sure hope not...

look at the previous thread, nbh is dominating the nhl market for skates... i dont think that their quality will completely drop of the map

im assuming that a number of people from the old bauer days are still employed by nike? they will most likely be kept on by the new ownership

[shooter27 117]

Greed is good for company owners, not customers,

While this comment definitely held true of financial sponsors back in the '80s when Kohlberg was making his name, it is not always the case today. There are many companies that benefit from being private and hidden from public view. There are numerous research papers done that quote CEO's of companies that have been taken private by sponsors that note how much more they are able to invest in things like R&D now that they are private and not under public scrutiny. Remember, when you are part of a public company your main goal as a CEO is to maximize profits and EPS for this quarter and this year. When you are owned by a financial sponsor, the time horizon to realize returns on investment is much longer (3-7 years depending on the sponsor). Therefore in many cases R&D budgets are able to expand.

Also, happened to notice this quote in a press release, for anyone wondering about the brand name.

"Under the terms of the deal, Bauer will continue to use the Nike Bauer Hockey trademark on existing products for a period of up to two years. "

[pat19 0]

I don't really get what this means. Is bauer totally going to change? are all the R&D people and everyone else going to be the same?

[Chadd 916]

Greed is good for company owners, not customers,

While this comment definitely held true of financial sponsors back in the '80s when Kohlberg was making his name, it is not always the case today. There are many companies that benefit from being private and hidden from public view. There are numerous research papers done that quote CEO's of companies that have been taken private by sponsors that note how much more they are able to invest in things like R&D now that they are private and not under public scrutiny. Remember, when you are part of a public company your main goal as a CEO is to maximize profits and EPS for this quarter and this year. When you are owned by a financial sponsor, the time horizon to realize returns on investment is much longer (3-7 years depending on the sponsor). Therefore in many cases R&D budgets are able to expand.

Also, happened to notice this quote in a press release, for anyone wondering about the brand name.

"Under the terms of the deal, Bauer will continue to use the Nike Bauer Hockey trademark on existing products for a period of up to two years. "

Most importantly a private company can make investments that focus on the long term without investors complaining about the impact on the current quarter. Far too many companies today are focused on short term shareholder numbers and not on the overall long term financial health of the company.

[JR Boucicaut 3805]

Spoke to the NBH Global Brand Director on the phone today. We're trying to work it out on a technical standpoint on his part, but the plans is to have a moderated chat in the Chat room in the next day or so. Stay tuned.

[JGraz15 55]

I thought this was interesting:

"Bauer will continue to use the Nike Bauer trademark on existing products for up to two years."

Sounds like any products released after this season won't have the swoosh.

[Chadd 916]

I thought this was interesting:

"Bauer will continue to use the Nike Bauer trademark on existing products for up to two years."

Sounds like any products released after this season won't have the swoosh.

No, they just won't require them to change the logo right away. Existing products would mean things like One95 or 9500 helmet, not just the stuff that was physically manufactured already. I would expect any new product unveiled next year to be the first stuff to not have the swoosh. Things like the Vapor XXXX skate replacement.

[lampliter87 8]

is that a little hint you just gave there, chadd?

[Chadd 916]

is that a little hint you just gave there, chadd?

logical extrapolation

Any new model that comes out next year shouldn't have the dual logo. Look at it this way:

Let's say the Vapor 50 skate comes out next year

We all know it's a 2009 product and skates usually last two seasons before they get replaced

By putting the NBH logo on it in 2009 and the Bauer logo on it for 2010 you would create a product that loses a large amount of its value simply because of a logo change.

That said, if they can use the logo on new product through 2010, the NBH logo might be used until the One95s get replaced.

[JGraz15 55]

I thought this was interesting:

"Bauer will continue to use the Nike Bauer trademark on existing products for up to two years."

Sounds like any products released after this season won't have the swoosh.

No, they just won't require them to change the logo right away. Existing products would mean things like One95 or 9500 helmet, not just the stuff that was physically manufactured already. I would expect any new product unveiled next year to be the first stuff to not have the swoosh. Things like the Vapor XXXX skate replacement.

That is exactly what meant. I agree.

[hockeyfreak 0]

I hope this means Bauer will go back to the more traditional looking skates. I'm not a big fan of the fancy designs. The Vapor XXXX has so much stitching that could possibly rip or tear.

[duch 0]

At least we'll be rid of some of those hideous skate designs that Nike had tried to market. It toke them almost ten years to market a skate that actually worked to some degree on the rink. The last few models are'nt too bad but I've heard durability isn't one of their strong points. I do like the fit though, something they seem to have incorporated into the newer Vapor line.

[CannonBall 0]

Maybe they'll bring back the Vapor 30 lite shafts and blades.

[Dangles919 0]

I can't wait for the bauer stuff they used to make before nike took over skates lasted so much longer back then hopefully we go back to that in the next couple years

[hockeyfreak 0]

Yes, that is what I was saying. Old Bauer skates were pretty well made, the new ones aren't the most durable. However, I think that all the skate manufacturers are sacrificing durability for lightness. Which is annoying because I'd rather have a skate that lasts a long time than a skate that is 50-100 grams lighter. That is why I bought Supra Graf's, they stick with tradition B) I've met a lot of people who have used their Graf's for 5+ years. I don't know anyone with a Nike bauer skate that old.

[VakarLajos 5]

Yes, that is what I was saying. Old Bauer skates were pretty well made, the new ones aren't the most durable. However, I think that all the skate manufacturers are sacrificing durability for lightness. Which is annoying because I'd rather have a skate that lasts a long time than a skate that is 50-100 grams lighter. That is why I bought Supra Graf's, they stick with tradition B) I've met a lot of people who have used their Graf's for 5+ years. I don't know anyone with a Nike bauer skate that old.

I totally agree with you. Skates being made lighter while sacrificing durability is not an issue with Nike Bauer alone. It's the entire industry. The closest thing I've seen to an old fashioned skat now is Graf's 703. 705, etc. People thinking they Bauer will revert back to the way it was in 1993 will be very disappointed. Many of the issues people have with Nike Bauer seem to be trends that are prevalent in the entire industry and will not change just because the swoosh is gone.

[icingboy 0]

They paid 200 Millions for a company selling for 160 Millions a year, bauer is a lot different now than when Nike grabbed it from Canstar for 380 Millions some 14 years ago,

They do not own a lot of factories, mostly all products are made in China by third parties manufacturers

bauer has closed down there hockey stick factory in Finland thie year and sold it to Frontierhockey in Eastonia,

What we have is a marketing company in need of help from third parties for all products made in the future, this is not a bright future

i think this will make it even more easy for Mission and Easton and not to mention RBK to be the biggest player in this industry very fast

Will workes follow over to Bauer from Nike and will there be new agents, dealers and companies all over the world taking care of the brand and sale, this is a very costly business and hard to get etablish on a short term basis, hope the new owner has plenty of cash to spare!