DULUTH, Ga. (BRAIN) — Fox Factory has sold its Marucci Sports division to Squared Up Holdings for $225 million; the company said it applies $200 million in cash from the transaction to pay down its debt.
Fox bought Marucci, which sells baseball and softball gear, for $572 million in 2023.
Squared Up Holdings is an acquisition vehicle for an investor group led by and including members of Marucci’s existing senior management.
Besides the $200 million cash, the deal included an unsecured promissory note for $25 million that matures on Dec. 31. Fox said it plans to put the $25 million toward debt reduction, as well. If it is not paid, it can be converted to equity in Marucci.
Fox said it has been evaluating strategic options for Marucci since February and the company and its financial advisors contacted over 80 potential acquirers and received 15 indications of interest.
Fox CEO Mike Dennison said, “Marucci is a strong brand with talented people and a loyal following among athletes, and we believe it is well positioned for continued success under new ownership. It did not deliver the returns we expected inside Fox, and we determined the optimal path forward was to improve our balance sheet and reallocate capital. We remain focused on building performance products for professional athletes and the enthusiasts who follow them, and our capital allocation priorities are unchanged: pay down debt, invest organically behind our performance products to ensure we retain the leadership position we’ve earned, and hold ourselves to a high return threshold on capital investments.”
In the first half of its fiscal year Fox Factory had a net loss of $10.9 million. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the half was $81.2 million and included an approximate $2 million in IEEPA tariff refunds. Despite the refunds, the EBITDA figure was down from the $88.9 million recorded in the first half last year.
Marucci was part of Fox's Speciality Sports Group, along with its bike businesses, done under the Fox, Marzocchi, Ride Concepts, RaceFace, and Easton cycling brands. Marucci also owns the Lizardskins brand, which started as a bicycle handlebar brand but now supplies grip tape for bats and other sports equipment, and continues to sell bike products as well.
