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Friday, May 20, 2022

Acquisition Will Bring Bat and Ball Together

Easton Diamond Sports in Thousand Oaks will become an even bigger fish in the pond of baseball and softball following its acquisition by Rawlings Sporting Goods Inc.Financial terms of the deal, which consolidates two top manufacturers of baseball equipment and apparel, were not disclosed.In an email to the Business Journal, Easton President Dan Jelinek said “the intent after closing is for Rawlings and Easton to combine to create a new baseball and softball organization. This combines the best teams, products and partnerships in the industry.”Jelinek said the two organizations are compatible in that Easton’s product line is strong where Rawlings’ is weak, and vice versa.Easton, having pioneered the construction of the aluminum bat in the 1960s, is a market leader in the manufacture and sale of bats to amateur and collegiate athletes. Meanwhile, Rawlings is the market leader in baseball gloves and the official manufacturer of baseballs used in Major League Baseball.“Other companies in the industry have a full product lineup, and by bringing together the complementary products from Rawlings and Easton, the combined organization will be positioned to offer a head-to-toe product offering, including Easton bats and Rawlings ball gloves, as well as apparel and uniforms,” Jelinek explained.

He said the new entity plans to retain Easton’s campus in Thousand Oaks, where the company’s headquarter offices and Hit Lab research and development complex have been located since 2016. It was previously headquartered in Van Nuys.

Jelinek conceded it’s too early to say what will become of Easton’s executive leadership team – including himself – and the 100-odd employees based in Thousand Oaks, but said “team members play a critical role.”The transaction is still subject to customary closing regulations. It is expected to close before the end of the year. Easton’s non-diamond sports brands, including cycling and hockey, aren’t included in the transaction and remain a separate entity.Easton is currently owned by Peak Achievement Athletics Inc. in Exeter, N.H., which owns several other sporting goods manufacturers including Bauer Hockey. Existing shareholders of Peak Achievement will retain a minority share in the new Easton-Rawlings entity following the transaction’s close.  Rawlings, headquartered in St. Louis, is owned by private equity firm Seidler Equity Partners in Los Angeles. Rawlings also owns baseball brands Miken and Worth.Among all those entities, one executive stands out as a unifying agent: Mike Zlaket.Zlaket is Rawlings’ Chief Executive, a post he has held for almost six years. Before joining Rawlings, he worked with Easton for a combined 21 years, starting as a product manager in 1991. Over two decades, he worked his way up to become vice president of Easton’s baseball and softball division and by 2013 was named Easton’s president. The next year, he helped broker the deal to sell the baseball division to Bauer Performance Sports for $330 million. That entity went bankrupt in 2016, leaving the window open for Peak Achievement to swoop in and buy both Easton and Bauer’s hockey business.He’ll again have control of Easton’s baseball operations once it combines with Rawlings.Symbiotic relationshipsAs market leaders in their own right, Easton and Rawlings both bring to the table valuable relationships with longstanding industry groups.When Seidler purchased Rawlings in 2018, the equity firm took on a co-investor and minority shareholder: Major League Baseball. Additionally, Seidler Equity’s owner Peter Seidler happens to be a managing partner of the San Diego Padres team.

Rawlings has been manufacturing baseballs for the MLB since 1955, and in 1977 became the league’s official baseball supplier. It has crafted every ball used in major league play ever since. The company is also MLB’s official supplier of helmets, faceguards and gloves, and sponsors the league’s top defensive fielding award, the Gold Glove.

Where Rawlings is connected to baseball’s top professional tier, Easton is entrenched in the amateur and youth scene. It is the official equipment supplier to Little League Baseball and Softball, and has ongoing relationships with the nonprofit United States Specialty Sports Association and several collegiate teams. It also sponsors dozens of MLB players, including Los Angeles Dodgers third baseman Justin Turner.

Jelinek said that for the combined entity to have deep ties with institutions at all levels of the sport is good not just for the company’s bottom line, but for baseball.  “This will drive increased participation, which will naturally drive increased sales for our retailer customers,” he said.

Such a prospective sales boost would help offset revenue interruptions related to the Coronavirus pandemic.

According to Marty Maciaszek, director of communications for the National Sporting Goods Association, baseball manufacturers were particularly affected because the virus emerged in March, right at the start of the season.

“Little League was delayed, youth leagues were delayed or canceled. That certainly affected purchasing,” he said.

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