G.F. Gay Le Breton And Liam Norton
https://bit.ly/Chaffe-CB-Dec23
Louisiana witnessed three significant acquisition transactions making headlines in November.
Baton Rouge-based Marucci Sports sold again, this time to Fox Factory Holding Corp for $572 million. The deal, which closed on November 15, saw Fox purchase the renowned sports equipment manufacturer’s parent company, Wheelhouse Holdings Corp. from its parent, Compass Diversified Holdings and others.
Marucci Sports was co-founded in 2009 by Kurt Ainsworth, a former Major League Baseball and LSU pitcher, and Joe Lawrence, former Toronto Blue Jays second baseman, along with Jack Marucci, the former LSU athletic trainer who built the first bat in his backyard shed in 2004.
By 2016, more than 40% of Major League Baseball players used Marucci bats, and the company sold an array of sports equipment and apparel. Marucci Sports was acquired by Compass Diversified Holdings in 2020 for $200 million.
According to “Bat Digest,” in the 2023 season, 24% of Major League players hit with Marucci bats on opening day and another 23% swung Victus bats, another Marucci brand.
Mike Dennison, CEO of FOXF, expressed his satisfaction with the deal: “This deal is not about baseball. It’s about adding a business to our platform that clearly meets out 1+1=3 growth criteria, given that each company’s individual power to grow and deliver shareholder value will be stronger together.” The merger promises to leverage Marucci’s strong e-commerce presence in combination with FOXF’s diversified product offerings, creating a formidable presence in the sports equipment industry.
FOXF expects the deal to be immediately accretive to its earnings per share, and boost its revenue and EBITDA margins, per FOXF’s November 15 press release.
In the electric utility industry, Cleco Corporate Holdings agreed to sell the unregulated electric utility business of its subsidiary, Cleco Cajun LLC, to Atlas Capital Resources IV LLP for approximately $600 million, subject to certain customary adjustments and payment schedules. The sale will transfer all of Cleco Cajun’s generating assets and contracts, consisting of 14 generating units with a combined capacity of roughly 3,400 megawatts and wholesale contracts with nine Louisiana-based cooperatives. The transaction is slated to close in the second quarter of 2024, pending various customary closing conditions and approvals.
Notably, Fitch Ratings affirmed Cleco Corporate’s credit rating at “BBB- / Stable,” citing the assumption that the corporate parent will use the cash flows from the Cajun assets sale to pay down existing debt and keep its credit metrics in-line with its “BBB-/Stable” rating.
CLECO Corporate Holdings is owned by a group of private investors led by Macquarie Infrastructure and Real Assets, one of the world’s largest infrastructure investors.
The last notable transaction involved the sale of a 30% stake in the “Who Dat” and “Dome Patrol” oilfields in the Gulf of Mexico, plus a 16% interest in the Abilene field. LLOG Exploration Offshore, located in Covington, agreed to sell these interests to Karoon Energy Ltd. for $720 million. The deal is expected to close before the end of the 2023 calendar year.
Karoon Energy is an oil and gas exploration and production company operating primarily in Australia and Brazil. The transaction will bolster its production by adding approximately four million barrels of oil equivalent to Karoon’s 2024 total output. The deal is in-line with both Karoon’s goal to diversify outside of its primary geography and LLOG’s strategy to divest its Gulf of Mexico oil exploration assets. LLOG is backed by Blackstone.
G.F. Gay Le Breton is Managing Director for Chaffe & Associates Inc., responsible for the corporate finance activities of the firm. Liam Norton is an investment banking analyst with the firm. Investment banking services are provided by Chaffe Securities Inc., member FINRA/SIPC.
