Fenway Building Sports Powerhouse –

SnapShot:

Target: Easton Sports

Buyer: Fenway Partners’ portfolio company RBH

Price: $400M

Financial Advisor: Easton: Wachovia Securities; RBH:

Goldman Sachs & Co.

Legal Counsel: Fenway/RBH: Ropes & Gray LLP;

Easton: Latham & Watkins

Accountant: Fenway: Ernst & Young

Fenway Partners, a New York-based private equity firm, is increasingly upping its ante in the sporting goods market. Earlier this month, the firm agreed to acquire Easton Sports in a transaction valued at approximately $400 million. Per terms of the transaction, expected to close sometime in the first quarter, Easton will be combined with Riddell Bell Holdings (RBH), an existing Fenway Partners portfolio company.

Eighty-four-year-old, family-owned Easton is currently being overseen by Jim Easton, the second generation owner and chairman of the company. He gained control of the company in 1972, after his father, Doug Easton, the company’s namesake, passed away.

In 2005, Easton, which specializes in the design, manufacturing and distribution of baseball bats, hockey sticks, bike frame tubing and other sporting goods used by baseball, softball, hockey and cycling professionals and enthusiasts, generated about $240 million in sales.

Once Easton is combined with RBH, the new company will be named Easton-Bell Sports Inc., and will generate more than $600 million in annual revenue. Jim Easton will remain a significant equity holder and chairman of the board of Easton-Bell.

Fenway Managing Director Mark Genender told Buyouts that Fenway had been interested in Van Nuys, Calif.-based Easton since the late 1990s. He added that Easton was the firm’s first attempt at acquiring a standalone company in the sporting goods market, but that a deal could not be reached.

Fenway eventually entered the sporting goods arena in 2003, through the more-than $100 million acquisition of Riddell Sports Group Inc., which is best known for manufacturing and marketing about 85% of the football helmets used by the NFL, Genender said. Then in 2004, the firm acquired Bell Sports Corp., a marketer of helmets and accessories for bicycling and other action sports, and combined it with Riddell.

“We continued to stay in touch with Jim [Easton] while we were looking for other companies to add on,” Genender said. “And, last summer when he began looking for someone to partner with who shared his vision of building a branded sports powerhouse, we were not only able to tell him we shared it, we could show him through the growth of Riddell.”

Fenway’s equity to support the transaction will come from its $909 million Fenway Partners Capital Fund II LP. Genender said the vintage-1998 is close to being fully invested but would neither confirm nor deny any preparations or fundraising activity for a Fund III.

Teachers’ Private Capital, the private investment arm of Ontario Teachers’ Pension Plan, helped Fenway cover the equity portion of the transaction and will acquire a minority interest in the combined entity. Mezzanine debt provider York Street Capital Partners will increase its existing equity investment in RBH as part of the transaction.

Genender said that the strategic synergies between the RBH and Easton represented an opportunity “too good to pass up.” Easton’s baseball, softball, and hockey businesses complement RBH’s Riddell football business, while Easton’s bike business fits “seamlessly” with the cycling, snow and motorcycle businesses of Bell, he said.

Wachovia and Goldman Sachs are serving as joint lead arrangers and book-runners in connection with $415 million in senior credit facilities to be used to refinance existing debt held by the combined company. The credit facilities will also be used to partially fund the Easton acquisition, working capital and other general corporate requirements.

The acquisition of Easton will be Fenway’s first transaction of 2006. Last year the firm closed four buy-side transactions, including the $382.5 million sponsor-to-sponsor buyout of Targus Group International Inc.-creator of the notebook computer carrying case-from Apax Partners, and the acquisition of Panther II Transportation Inc., one of the largest providers of expedited ground transportation services in North America.