Looks Like Amer Sports is Going Private
Back in October, there was some speculation that somebody wanted to buy Amer Sports and Amer said, “Yup, it’s true. We’re talking.” I wrote a short article about it at the time.
On December 7th, they confirmed that there is, in fact, a cooperative tender offer coming beginning around December 20th. Here’s the link to the press release on the subject. At that time, a tender offer document with full information will be available.
The cash price will be 40 Euros per outstanding share, valuing Amer Sports at 4.6 billion Euros. The financing is already arranged.
The offer is being made by Mascot Bidco Oy, a company formed for the purpose of acquiring the shares.
“ANTA Sports Products Limited, FV Fund (an investment vehicle managed by FountainVest Partners), Anamered Investments (an investment vehicle owned by Mr. Chip Wilson) and Tencent (investing through Tencent SPV as a limited partner in FV Fund) …” are the entities funding the purchase. Chip Wilson, we all know, is the founder of lululemon.
Here’s a summary of the stated rationale for the deal from the press release. We’ll learn more when tender offer document comes out.
The Investor Consortium intends to invest significant time, resources and effort in helping Amer Sports to accelerate several important ongoing and new strategic initiatives under private ownership, including expanding Amer Sports’ businesses in the Chinese market.
This includes investing capital and resources in product development and human talent on a global basis to provide Amer Sports’ existing management team and employees with the optimal platform from which to implement its medium- to long-term strategic plans. In doing so, Amer Sports will not only grow into a broader platform for Amer Sports’ employees to thrive on, but will also form stronger, mutually beneficial partnerships with all its stakeholders.
The Investor Consortium intends to provide Amer Sports with access to ANTA Sports’ extensive distribution network, R&D resources and manufacturing and sourcing capabilities in China, such that Amer Sports will have a significant opportunity to accelerate the expansion of its businesses in the Chinese market.
After the completion of the Tender Offer, the Investor Consortium plans for Amer Sports to be operated independently from ANTA Sports, with a separate Board of Directors. The Investor Consortium has invited Mr. Heikki Takala (President and CEO of Amer Sports) and his key executives to continue leading the business. Under the new ownership, Amer Sports’ management team would have the autonomy to execute on its business plan under the strategic direction of the Board of Directors.
The completion of the Tender Offer is not expected to have an immediate material effect on the operations, assets, the position of the management or employees or the business locations of Amer Sports.
The Investor Consortium currently expects to retain Amer Sports’ corporate head office in Helsinki after the completion of the Tender Offer.
In recent years, we’ve seen more and more public companies end up private. The argument I’ve been making is that the current business environment is easier to address as a private company. The required focus on organizational flexibility, expense control, brand building, controlled distribution and reacting to, rather than leading your customer- all of which can tend to sacrifice the top line for the bottom line- is just easier to accomplish as a private company that doesn’t have to explain itself to the stock markets.
I can’t say that’s the only thing happening here, but I’m pretty sure it’s a consideration. We’ll find out more when we get additional information in a week or so.