Canadian Press July 27, 2017, 5:48 PM
MONTREAL — German sportswear manufacturer Adidas has announced an agreement to sell its CCM hockey-equipment subsidiary to a Canadian firm for US$110 million.
The multinational said Thursday it will sell CCM to Toronto-based Birch Hill Equity Partners, with the majority of the transaction to be paid in cash.
The deal is expected to close at the end of the third quarter of 2017.
Adidas said the decision is in line with its desire to refocus its activities on footwear and sportswear through its Reebok and Adidas brands.
CCM was purchased at the same time as Jofa and Koho in 2004 by Reebok, which was focused on establishing itself in the hockey market before it was purchased by the German company.
CCM is headquartered in Montreal’s St-Laurent borough with manufacturing plants in St-Hyacinthe and St-Jean-sur-Richelieu.
The company employs approximately 580 people in total, including 500 in Canada.
CCM was founded in 1899 under the name Canada Cycle and Motor Company. At that time, it manufactured bicycles and automotive equipment.
In 1905, the company began manufacturing skates using scrap metal from the bicycle and auto parts factory.
The company went bankrupt in 1983, ceasing production of bicycles, but the skates division continued independently under the CCM banner.
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As a seasoned enthusiast with a deep understanding of the sports industry, particularly in the realm of mergers and acquisitions, I can confidently shed light on the intricacies of the Adidas-CCM deal announced on July 27, 2017. My expertise in sports business and corporate transactions allows me to analyze and interpret the implications of such strategic moves within the industry.
The announcement made by German sportswear giant Adidas to sell its CCM hockey-equipment subsidiary to the Canadian firm Birch Hill Equity Partners for a staggering US$110 million reflects a pivotal moment in the sports equipment market. The multinational corporation, Adidas, made it clear that the decision aligns with its overarching strategy to refocus its business activities, concentrating more on footwear and sportswear under its flagship Reebok and Adidas brands.
This strategic shift is not just a mere financial transaction; it signifies the dynamic nature of the sports industry and the constant adjustments made by major players to stay competitive. Adidas, having acquired CCM along with Jofa and Koho in 2004 through its subsidiary Reebok, had initially aimed to establish a formidable presence in the hockey market. However, the subsequent acquisition of Reebok by Adidas altered the corporate landscape, prompting a reassessment of business priorities.
CCM, tracing its roots back to its foundation in 1899 as the Canada Cycle and Motor Company, underwent a remarkable evolution. Initially manufacturing bicycles and automotive equipment, the company pivoted to producing skates in 1905, utilizing scrap metal from its bicycle and auto parts factory. Despite facing bankruptcy in 1983 and discontinuing bicycle production, the skates division persevered independently under the CCM banner.
Headquartered in Montreal’s St-Laurent borough with manufacturing plants in St-Hyacinthe and St-Jean-sur-Richelieu, CCM has been a key player in the hockey equipment industry. The company employs approximately 580 people, with a significant workforce of 500 in Canada.
The impending closure of the deal at the end of the third quarter of 2017 signifies not only a financial transaction but also a strategic realignment within the sports industry. This move allows Adidas to streamline its focus, providing valuable insights into the ever-evolving dynamics of the global sports market.
In conclusion, the Adidas-CCM deal is not just about the transfer of assets; it is a testament to the complex interplay of corporate strategy, industry dynamics, and the enduring legacy of a company that has adapted and thrived over more than a century.
