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Newly public Bauer eyes markets beyond ice hockey
March 11, 2011 / 7:45 PM / 7 years ago

Newly public Bauer eyes markets beyond ice hockey

TORONTO (Reuters) - Bauer Performance Sports Ltd BAU.TO, creator of the modern ice hockey skate, says it expects its initial public offering this week to herald growth in existing markets and expansion into new ones through acquisitions.

The 84-year-old Canadian company, now the world’s biggest maker of ice hockey gear, launched a C$75 million ($77 million) IPO on Thursday, floating a 30 percent stake.

The stock was trading 2 percent lower at C$7.33 on the Toronto Stock Exchange on Friday, following a decline the previous day.

“We appreciate that it might take the investment community some time to understand our business and for us to be able to create the same performance that we have for our athletes and our products for our shareholders,” Chief Executive Kevin Davis said in an interview with Reuters.

Bauer says it wants to increase revenue faster than the industry average through a combination of market share gains and acquisitions. It says it also expects to increase profit faster than revenue.

Expansion in the hockey market may not be a smooth road for Bauer, said Bob Stellick of sports marketing firm Stellick Marketing Communications.

“Outside of Canada and the United States, what are the opportunities to grow the game of hockey? I wouldn’t say it has growth potential like basketball or soccer. It’s a strong niche sport.”

Stellick sees the company growing in single digits.

Expanding market share is “a bit more challenging when you’re already the dominant player,” he said.

The company says it has a 45 percent share of a global ice hockey equipment market worth $555 million a year. It has recently expanded into roller hockey and lacrosse, and said it is eyeing acquisition targets in other sports that require high-performance equipment.

It has changed its name from Bauer Hockey to reflect the shift in focus.

“They have to be the existing market leader or have the potential to become the market leader,” Davis said of acquisition targets. “There are a lot of businesses out there that meet our criteria.”

Davis expects Bauer, which has made three acquisitions in as many years, to continue that pace.

Its most recent acquisition was Maverik Lacrosse, which it bought last year, expanding its reach to a fast-growing team sports.

    Bauer continues to see room for growth in hockey, a market that has been growing at 1 percent to 2 percent a year over the past year.

    One of the most recognized brands in the sport, Bauer gear is used by National Hockey League players such as Phil Kessel of the Toronto Maple Leafs and Eric Staal of the Carolina Hurricanes.

    “We continue to grab market share in every category in every region of the world,” Davis said of the hockey market.

    The company’s rivals include Adidas-owned (ADSGn.DE) Reebok, whose brands include CCM, and Easton-Bell Sports.

    Bauer was owned for about a decade by U.S. sporting goods giant Nike (NKE.N) before being sold to private equity firm Kohlberg & Co in 2008.

    Since 2008, when Davis became CEO of the company, it has increased revenue at a compound annual growth rate of 11 percent.

    Founded in Kitchener, Ontario, Bauer developed the first skate with a blade attached to the boot, an innovation credited with changing the game of ice hockey.

    ($1=$0.97 Canadian)

    Reporting by Pav Jordan and S. John Tilak; editing by Peter Galloway

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