A European firm acquires CCM

Two days after Fairfax announced a takeover of hockey equipment manufacturer Bauer, Montreal rival CCM is in turn the subject of a transaction.

The Swedish private investment firm Altor must reveal on Wednesday the acquisition of a “largely majority” stake in CCM, whose products are notably used by several big NHL stars such as Connor McDavid, Auston Matthews and Sidney Crosby.

The overall value of the agreement remains confidential, but according to our information, it is estimated at more than half a billion Canadian dollars.

As part of the transaction, a handful of CCM’s top executives are reinvesting in the company.

The sale of CCM comes at the end of a process launched at the start of the year to find a buyer.

After belonging to the German giant Adidas for a dozen years, CCM became Canadian property again seven years ago after its purchase by the Ontario investment firm Birch Hill. The transaction was then valued at 110 million US dollars.

Marrouane Nabih explains that Birch Hill decided to sell because the investment cycle has come to an end. Private equity firms often invest with a horizon of five to seven years.

Altor was founded in Sweden and has several offices in northern Europe. “Altor has exceptional expertise in the consumer goods sector,” says Marrouane Nabih. In the past, Altor has notably invested in companies such as the ski equipment manufacturer Rossignol and the sports clothing specialist Helly Hansen.

Marrouane Nabih says that confidentiality agreements (NDA) giving access to certain financial information were signed with “dozens” of potential buyers and that more than a dozen purchase offers were studied during the sales process .

“We had the level of interest that we hoped for,” says the former Cascades executive, who was CCM’s chief financial officer for a little more than two years before taking control of CCM in 2021.

He maintains that the company will soon announce investments that will confirm the desire to continue to grow the organization.

Become number one

CCM is number two behind Bauer in terms of market share, all product categories combined, with just under 40% (Bauer estimates its market share at 53%).

“Our goal is to become number one,” says Marrouane Nabih. He is counting on Altor’s market penetration strategies to help CCM achieve this. “We believe we are with the right partner to shape the next story of CCM as the number one player in the industry. »

Marrouane Nabih says CCM is already number one in every player product category except the important skate category, where Bauer estimates its global market share at 70%.

CCM’s annual turnover is estimated at more than half a billion Canadian dollars. To increase it, Marrouane Nabih not only sees possibilities in equipment, he also sees them in clothing and elsewhere. “We prefer not to specify it too much today,” he said.

“We conducted surveys during our due diligence and we believe that the CCM brand can be about much more than just the equipment aspect,” comments Andreas Källström Säfweräng, partner at Altor, in an interview. “We intend to ensure we maximize the potential of the brand, which has not yet been done,” he adds.

On Monday, Ontario holding company Fairfax announced it was taking control of Bauer and other sports brands by purchasing the stake of its partner Sagard, a Power Corporation group entity.

The size of the stake sold by Sagard to Fairfax and the value of the transaction have not been disclosed. CIBC analyst Nike Priebe, however, estimates that the operation will bring in between 300 and 350 million for Power Corporation.