Seidler Equity Partners has teamed with Major League Baseball to buy Rawlings Sporting Goods, a sports equipment manufacturer best known for its baseball gear and apparel, from Newell Brands for approximately $395 million. Newell, which owns a range of consumer companies including Sharpie, expects to net $340 million, which it will use to pay down debt and conduct a share repurchase.
SEP, a middle-market investor based out of Marina Del Rey, CA, isn't exactly a household name in private equity circles. But the firm closed its sixth flagship vehicle on about $600 million this past November in what marked its biggest fundraise ever. And it was co-founded by current partner Peter Seidler, who along with his family owns a stake in the San Diego Padres and the sports complex Historic Dodgertown in Florida. Seidler is also the nephew of late Dodgers owner Walter O'Malley, which helps explain the firm’s ties to the baseball world.
Still, this deal marks new territory for the buyout shop. SEP has maintained a low profile throughout its history, never striking more than four PE deals in any one year since at least 2007, according to the PitchBook Platform. In addition, it's easily the firm's largest known transaction in that window, topping the time it helped sponsor LA Fitness when it bought 171 Bally Total Fitness clubs for $153 million in 2011.
Why partner with MLB? Rawlings, which also owns the Miken and Worth brands, makes the official baseball used by the league. Those baseballs have come under increased scrutiny over the past few years as home runs rates jumped to historic levels. Now, MLB apparently wants increased oversight.
"MLB is excited to take an ownership position in one of the most iconic brands in sports and further build on the Rawlings legacy, which dates back to 1887,” said Chris Marinak, MLB’s executive VP for strategy, technology and innovation. “We are particularly interested in providing even more input and direction on the production of the official ball of Major League Baseball, one of the most important on-field products to the play of our great game.”
The latest news comes as part of Newell’s “accelerated transformation plan,” through which it's divesting some of its assets in a move aimed at pulling the business out of its recent slump. And divest it has. Earlier this month, the company agreed to sell The Waddington Group to Novolex, a fellow packaging business backed by The Carlyle Group, for some $2.3 billion.
Learn more about some of Newell's divestitures.