Sports Insight

December 2018 ~ Sports Insight • 23 sportsinsightmag.com Acquisition Action MERGERS AND acquisitions in the sporting goods industry are increasing in frequency — and changing the way the game is played. The overall health of the "mergers and acquisitions" market remains strong, despite potential headwinds from rising interest rates, and should continue into 2019 thanks to tax code and other policy changes. The overall M&A market was up 57 percent through July 2018 to a record $4.8 trillion, according to the Wall Street Journal, with the outdoor and sporting goods markets representing an unspecified percentage of that total. Joe Pellegrini, managing director for finan- cial services firm RW Baird in Charlotte, NC, says there are two type of players in the industry M&A market — consolidators, such as VF Corp. and Implus, and streamlin- ers, Nike, Adidas and Vista Outdoor to name three, that are fueling the activity. And many factors are sparking M&A interest, including the increasing interest of companies to lever- age or build their digital know-how. Innovation, new comfort features, new materials, new ways of providing the con- sumer with better product, better styling and better functionality are some of the factors that may prompt a potential acquirer to strike a deal. Pellegrini cites Implus as doing an out- standing job understanding market needs and responding to it through more than a dozen acquisitions in recent years. Most recently, Implus acquired the kine- siology tape brand RockTape. RockTape's products will be additive to Implus' existing suite of health and wellness brands which include TriggerPoint, Harbinger, Spenco, Perfect Fitness, SKLZ and more. "The brand has massive room for growth within our current distribution network," states Seth Richards, CEO of Implus, adding that the RockTape team's experience in the Clinical channel "should provide tangible benefits for a number of our other brands." Pellegrini notes that "Implus saw a need at retail to marry more innovation, better merchandising and customer service for the retailer to professionalize the performance accessory market." Pellegrini also cites recently gone public Yeti, known for its premium coolers, for "re- inventing a tired, old category." As for the banker's advice to those retailers or companies considering an M&A strategy today, he urges them to not "try and time the market." Instead, Pellegrini suggests these interested parties should zero in on building their respective organizations, digital experi- ence and financial reporting skills. "Stay focused on building a durable brand and business. And that will be recognized over time," he says. — Bob McGee February 26 - 28, 2019 ENVISION. ENGAGE. EVOLVE. "Implus is doing an outstanding job understanding market needs and responding to it through more than a dozen acquisitions in recent years."

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