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Sale of Easton cycling is latest big change at BRG Sports

Published April 23, 2014

SCOTTS VALLEY, Calif. (BRAIN) — Say goodbye to those public quarterly earnings reports and investor conference calls from Easton-Bell Sports. The termination of those reports is just one of the several changes resulting from the company's sell-off of its Easton-branded businesses.

The company's parents, Fenway Partners and the Ontario Teachers' Pension Plan, garnered $330 million from the sale of its Easton-branded baseball and softball business, a sale that was completed last week. That cash allowed Easton-Bell Sports to pay off several loans that triggered the SEC rule requiring the public disclosure.

With the completion of the sale, the company changed its name to BRG Sports and its official headquarters address moved from Van Nuys, Calif., to Scotts Valley, which has been the company's largest office for years.

Bell Sports was publicly traded in the 1990s and went private in 1998. Executive chairman and CEO Terry Lee said the new private structure reduced corporate expenses. He also told BRAIN he would continue to be available to share information that has provided fodder for articles on this website at least once a quarter.

"You can call anytime you want and we'll give you all the news we can. I can tell you, for example, we had a very good first quarter," he said this week on a conference call related to the sale of the Easton cycling business. "I can't give details like I used to, point by point, but we are very pleased by our progress in the first quarter."

Lee also discussed why the sale of its Easton cycling business to Chris Tutton would benefit its remaining business. BRG retains the Bell, Riddell and Giro brands. It also still owns the Easton hockey business, but expects to sell that soon.

Easton cycling is a different kind of business than its former siblings, Lee said.

"Aside from being a smaller business, wheels are very service-oriented and there is a sizable OEM aspect to the wheel business, neither of which is the case with helmets," he said.

While the Riddell football helmet business serves a very different market than BRG's action sports brands, Lee said Riddell was a core business because at its heart Bell has always been a helmet business.

In the past two years, Easton-Bell Sports had reorganized internally to create two distinct groups within its action sports business: Bell/Blackburn and Giro/Easton. Greg Shapleigh, who has headed up the Giro/Easton business since the reorganization, will now focus solely on Giro.

Shapleigh, on the same conference call with Lee and BRAIN, said that was good news.

"We will be able to be a lot more focused; instead of having a staff divided between two brands we are now 100 percent focused on Giro, which is in a real growth phase currently," Shapleigh said. He said Giro's helmet, footwear, apparel and accessory sales are all growing rapidly. He also said Giro will continue to use Easton-branded carbon outsoles on some of its cycling shoes for at least the next two seasons.

Under Lee, the Bell Sports organization in its various configurations has never been shy to acquire brands — or to shed them when they no longer contributed to the company's core focus. Acquisitions have included Rhode Gear, Blackburn, Giro, Vistalite and American Recreation Co. (parent of the distributors Service Cycle and Denrich and owner of the Mongoose brand). It has also been merged with Riddell and Easton. 

It has sold Mongoose (to Brunswick), Rhode Gear (to Yakima), Hydrapak (to Matt Lyon) and now, Easton. 

Topics associated with this article: Mergers/Acquisitions, Earnings/Financial Reports

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