Prominent baseball equipment manufacturer Rawlings Sporting Goods Inc. has entered into a definitive agreement to acquire fellow equipment brand Easton Diamond Sports in a deal designed to create a dominant entity in the youth and recreational levels of sport.
The St. Louis, Missouri-based Rawlings, which has a particularly strong presence in the production of balls, gloves, and helmets for baseball and softball, will combine with the California-based Easton, whose market presence is most notable in non-wood bats and other protective equipment.
Financial terms were not disclosed. But a deal closing is projected in the next 30 to 45 days, following regulatory approvals, and both brands will continue to be used after that. Existing shareholders in Easton parent company Peak Achievement Athletics Inc. will remain as minority owners in the combined entity.
Rawlings is owned by a private equity fund led by San Diego Padres general partner Peter Seidler and MLB itself following a $395m deal struck in 2018. And not unlike MLB’s efforts to assume a greater presence in the affiliated minor league, independent professional, and collegiate levels of play, the acquisition of Easton presents a large-scale opportunity for MLB to expand its profile at the youth and recreational levels of competition.
“The original Rawlings deal was about having a seat at the table with a key supplier and being able to be involved in a deeper way,” said Chris Marinak, MLB chief operations and strategy officer. “This transaction is a bit different, but it’s really designed to helping to grow the youth and amateur market. You look at the companies’ respective market positions and products, how complementary there were to each other, and together, it really creates a one-stop shop for that level of the sport that’s really compelling.”
Discussions toward a deal with Easton began not long after the original Seidler-MLB purchase of Rawlings. The notion of a combination with Easton was fueled significantly by the presence of Rawlings president and chief executive Mike Zlaket, who previously spent more than 20 years with Easton in two different stints.
“Over the years, Rawlings and Easton have shared a dedication to being best in class, which is the one constant that ultimately inspired our coming together and what will create the best baseball and softball company in the world,” Zlaket said.
Much of youth sports in the United States have taken a sizable hit this year in activity and revenue because of the ongoing Covid-19 pandemic. But Mike Thompson, Rawlings executive vice president of marketing, said the combined entity will be significant poised for a quick rebound.
“We think this market comes back, and does so very rapidly with a lot of pent-up demand,” Thompson said. “And as we put more resources into research and development and share our innovation across the combined entity, we see tremendous upside.”
Additional details with regard to staffing plans after the acquisition closes have not yet been finalized.
Rawlings, meanwhile, last year was prominent subject of widespread accusations of an overly lively ball at the MLB level as a new record for home runs was set. A study released last December by MLB pointed to “changes in player behavior” to explain the power surge, while other independent studies pointed to various other factors including the slickness of the ball.
The company is also due to take on the league’s official on-field glove rights exclusively next year.