Riddell Sports Group, Inc. is a leading designer, manufacturer and licensor of branded sporting goods. The company manufactures the official helmet of the National Football League and is also the top supplier of helmets to collegiate, high school and youth leagues. The Chicago-based company also provides helmet reconditioning services nationwide and has created a growing market for its branded athletic equipment such as shoulder pads, uniforms, and practice wear. The company's reputation for product quality, safety and innovation has earned Riddell a leading share in its primary markets. Its licensing agreements help ensure wide exposure of the Riddell name and position the company for future growth.
In June, 2003, Fenway Partners, Inc., a New York-based private investment firm, purchased a controlling interest in Riddell from Lincolnshire Management. In support of the transaction, American Capital Strategies, Ltd. (Nasdaq: ACAS) provided $23 million in senior subordinated debt and equity.
"American Capital's investment in Riddell is an exciting opportunity. We are supporting a company with one of the strongest brand names in the sports equipment industry," said American Capital Principal Brian Graff. "Riddell is a well-established company and has capitalized on its extensive brand exposure, great customer relationships, national direct sales force and history of successful product innovations. In particular, Riddell leads the football helmet manufacturing and football equipment reconditioning markets. Its position as the official helmet of the NFL is testimony to the company's quality product."
Founded in 1922 when John T. Riddell invented the first removable cleat, the company was family owned until 1988. It was bought by a private firm and later taken public in 1991, the year it acquired All American Reconditioning. In the last decade, Riddell has made further acquisitions, expanded its product line and diversified into other sports while continuing to focus on its core business of manufacturing new helmets and reconditioning old ones. In 1995, it entered into an exclusive licensing agreement with the NFL that has significantly increased the Riddell brand's exposure and recognition. The company also has strong relationships with many collegiate teams, where its helmet is worn by a majority of Division I players.
In 2002, the company introduced the Revolution, the first helmet designed with the intent of reducing the risk of concussions. The helmet has quickly become one of the industry's hottest new offerings and is being worn by star players such as Jerry Rice and Peyton Manning. Riddell recently launched the youth version of the Revolution for the 2003 football season.
Riddell is also the leading reconditioner of athletic equipment in the United States. The company reconditions both its own and its competitor's helmets, shoulder pads, and other athletic equipment and is the only national provider of this service. The reconditioning process, usually done every year, includes inspection, cleaning, painting and repairing, and is required for National Operational Committee for Safety in Athletic Equipment (NOCSAE) certification.
The company also sells Riddell branded collectible products, such as replica helmets. These products typically carry licensed NFL and major collegiate trademarks and are distributed to retailers and direct marketers.
ACAS' $23 million investment in Riddell was made alongside a senior term loan and revolving credit facility led by Wachovia. ACAS also joined Fenway with an equity investment. Riddell joins ACAS' portfolio of more than 77 companies. Since 1997, American Capital has invested approximately $1.8 billion in support of middle-market buyouts and recapitalizations.
For more information about American Capital's portfolio click here.
Football has become America's favorite sport and continues to gain popularity. It is also the most popular and largest sport for boys in high school. In 2002, the market for new helmets and reconditioning services was approximately $89 million and expected to reach $111 million by 2010. The market has proved to be resistant to recessions and cutbacks. Because of safety concerns, helmets are one of the last items to be cut from high school sports budgets. NFL and Division I collegiate purchases are also resistant to budgetary constraints because the newest and best equipment is standard policy.
As it embraces new market opportunities, Riddell is aligned with the priorities of its customers. Coaches, athletic directors and league managers look for the Riddell hallmarks of safety and quality rather than pricing. Furthermore, as the only manufacturer to sell direct, Riddell keeps a finger on the pulse of what its customers want, enabling the company to provide a higher level of service and gain an understanding of market needs.
Now at the top of its game, Riddell is ready to meet the future head on.
