Prince Sports, the pioneering manufacturer behind the oversized tennis racquet, and sponsors to some of the sport’s biggest names, unfortunately filed for Bankruptcy earlier this year. The tennis equipment giants cited increased competition, mounting debts and falling sales as reasons for the filing in a US court, showing that even the most successful companies have felt the effects of the recent financial crisis.
Having started out in the 1970s as a maker of tennis-ball machines, Prince Sports quickly grew into one of the top manufacturers of tennis racquets and tennis balls, sponsoring such high profile names as Martina Navratilova, Patrick Rafter, Gael Monflis and Maria Sharapova along the way. For all its success as a manufacturer of professional-quality tennis equipment, over the years the company has undergone a number of private equity deals, which led to changes in management and investors. Most recently, in 2007, the company was acquired by Nautic Partners.
Despite the relative financial security of this acquisition, the company began to face numerous financial troubles, which it attempted to solve by selling the rights to its brands and overseas operations in both 2010 and 2011. Although a total of nine potential bidders were found during the second attempt at sale, the bids offered were “substantially less than the existing amount of debt.” A huge blow, this final failed attempt to sell left the company seeking bankruptcy protection with total debts of around $77 million and a book value of $54.2 million.
One of the sports equipment company’s biggest debts – a total of $65 million – is to the brand development and licensing company Authentic Brands Group (ABG) who are expected to acquire the company having purchased the debt at the end of March. Although approval is still required from the bankruptcy court in the US for this re-structure and acquisition, confidence is high as Prince Sports Chief Executive Gordon Boggis confirmed in recently released statement: “We expect to emerge from this period as a more efficient, performance racquet sports brand with a more competitive model in the market, while eliminating the economic constraints that have prohibited the brand from achieving its potential.”
With a future looking relatively secure for this innovative company, here’s hoping that we’ll continue to see their racquets and equipment in the kit bags of the world’s pro players for many more decades to come.
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