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As Bauer soars, private equity backer cashes in

Kevin Davis, president and CEO of Bauer Performance Sports, which went public last March, said the company is not expecting the high-performance Nexus line to be as big as its Supreme and Vapor products.

Deborah Baic/The Globe and Mail/Deborah Baic/The Globe and Mail

Did you know Bauer Performance Sports is up 66 per cent this year?

After losing roughly 30 per cent in the first few months following its initial public offering, the sports equipment maker has been on a tear, almost doubling in price from its lows. Watching this rise, Kohlberg Funds, its private equity backer, has started to cash out – and smartly so.

In June, Kohlberg brought in a few million when Bauer launched a bought deal to mostly finance its acquisition of Cascade Helmets. Late Wednesday, the private equity supporter was back at it, selling another $35-million into the market. Following the latest deal, Kohlberg will own about 43 per cent of the outstanding shares.

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But this isn't really about smartly playing the waiting game. It's about Bauer's results, which have been strong. In August, the company reported record year-end revenues and earnings, driven by a solid year for ice hockey equipment, its main business line. The equipment maker has focused on lowering everyday expenses, and adjusted net income was up 47 per cent for over the year prior.

Now you're wondering, can they keep this up if the NHL is locked out this year? The short answer: management thinks so. Bauer's aware of the fears and execs have been out speaking at conferences and doing Q&A's like this one to alleviate any worries.

RBC Dominion Securities and Paradigm Capital co-led the latest offering.

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About the Author
Reporter and Streetwise columnist

Tim Kiladze is a business reporter with The Globe and Mail. Before crossing over to journalism, he worked in equity capital markets at National Bank Financial and in fixed-income sales and trading at RBC Dominion Securities. Tim graduated from Columbia University's Graduate School of Journalism and also earned a Bachelor in Commerce in finance from McGill University. More

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