The Power Behind the Puck: How Private Equity and Billionaires Control the Hockey Industry
If you are a hockey fan or player, you probably know that Bauer Hockey and CCM Hockey are the two biggest brands in the hockey equipment market. They produce everything from skates, sticks, helmets, gloves, pads, and apparel for players of all levels and ages. They also sponsor some of the best players and teams in the world, such as Sidney Crosby, Connor McDavid, Auston Matthews, Nathan MacKinnon, and the Toronto Maple Leafs, the Montreal Canadiens, and the Edmonton Oilers.
But do you know who owns Bauer Hockey and CCM Hockey? And do you know who funds their owners? You may be surprised to learn that behind these iconic hockey brands are private equity firms and Canadian billionaires and their holding companies. In this blog post, we will reveal the power behind the puck and how private equity and billionaires control the hockey industry.
Bauer Hockey: From Nike to Peak Achievement Athletics
Bauer Hockey was founded in 1927 in Kitchener, Ontario, by the Bauer family, who also owned the Western Shoe Company. Bauer was the first hockey company to produce skates with the blade permanently attached to the boot, which revolutionized the game. Over the years, Bauer expanded its product line to include other hockey equipment and accessories, and became the market leader in the industry.
In 1994, Bauer was acquired by Nike, the global sports giant, for $395 million. Nike rebranded Bauer as Nike Bauer and invested heavily in research and development, marketing and advertising, and endorsements. Nike Bauer dominated the hockey market for more than a decade, until Nike decided to sell the brand in 2008, as part of its strategy to focus on its core businesses.
In 2008, Nike sold Bauer Hockey to Kohlberg & Company, a private equity firm based in New York, for $200 million. Kohlberg & Company renamed the brand as Bauer Performance Sports and took it public on the Toronto Stock Exchange in 2011. In 2014, Bauer Performance Sports acquired Easton Hockey, another major hockey brand, for $85 million, and became the largest hockey equipment company in the world.
In 2016, Bauer Performance Sports was acquired by Sagard Holdings, a private equity firm based in Montreal, and Fairfax Financial, a financial holding company based in Toronto, for $575 million. Sagard Holdings and Fairfax Financial renamed the company as Peak Achievement Athletics and took it private. Sagard Holdings is the investment arm of Power Corporation of Canada, a diversified international management and holding company. Power Corporation of Canada is controlled by the Desmarais family, one of the richest and most influential families in Canada. Paul Desmarais Jr., the co-chairman and co-CEO of Power Corporation of Canada, is the chairman of Sagard Holdings and Peak Achievement Athletics. His net worth is estimated at $5.2 billion, according to Forbes.
CCM Hockey: From Adidas to Birch Hill Equity Partners
CCM Hockey was founded in 1899 as the Canada Cycle & Motor Company, a bicycle manufacturer based in Weston, Ontario. In 1905, CCM started to produce hockey skates, using the scrap steel from its bicycle production. CCM soon became the leading hockey skate manufacturer in Canada, and later expanded its product line to include other hockey equipment and accessories.
In 2004, CCM Hockey was acquired by Reebok, the global sports company, for $204 million. Reebok rebranded CCM as Reebok Hockey and integrated it with its existing hockey division. Reebok Hockey became the second largest hockey equipment company in the world, behind Nike Bauer. In 2006, Reebok was acquired by Adidas, the global sports giant, for $3.8 billion. Adidas continued to operate Reebok Hockey as a separate brand, until 2013, when it revived the CCM brand and phased out the Reebok brand.
In 2017, Adidas sold CCM Hockey to Birch Hill Equity Partners, a private equity firm based in Toronto, for $110 million. Birch Hill Equity Partners kept the CCM brand and took the company private. Birch Hill Equity Partners is one of the largest private equity firms in Canada, with over $3 billion of capital under management. Birch Hill Equity Partners is backed by some of the wealthiest and most powerful individuals and families in Canada, such as the Weston family, the Thomson family, the Richardson family, and the McCain family. Their net worths range from $1.5 billion to $41.7 billion, according to Forbes and Bloomberg.
The Bottom Line
Bauer Hockey and CCM Hockey are the two dominant players in the hockey equipment market, with a combined market share of over 80%. However, they are not owned by hockey enthusiasts or entrepreneurs, but by private equity firms and Canadian billionaires and their holding companies. These entities have the financial resources, the strategic vision, and the industry connections to grow and sustain these hockey brands, but they also have the power to influence and shape the hockey industry, for better or for worse. As hockey fans and players, we should be aware of the power behind the puck and how private equity and billionaires control the hockey industry.