Hopefully I'll do a quick substack on this one, because its really bad. LOL.Fox bought the company for $572M, financed with debt. Interest on the debt...
Hopefully I'll do a quick substack on this one, because its really bad. LOL.
Fox bought the company for $572M, financed with debt. Interest on the debt was roughly $107-115M per year. The unit was generating roughly $65-73M in EBTIDA per year.
When you net everything out, Fox lost about $400M before counting capex and working capital.
The only thing Fox retains in this deal are the losses. No IP sticks around, not that they'd want it anyway. Baseball has nothing to do with suspension.
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working...
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working on I'd 100% be fired (and maybe a lawsuit would follow).
I’ve seen people get fired for selling discounted drinks to their partner.
Hopefully I'll do a quick substack on this one, because its really bad. LOL.Fox bought the company for $572M, financed with debt. Interest on the debt...
Hopefully I'll do a quick substack on this one, because its really bad. LOL.
Fox bought the company for $572M, financed with debt. Interest on the debt was roughly $107-115M per year. The unit was generating roughly $65-73M in EBTIDA per year.
When you net everything out, Fox lost about $400M before counting capex and working capital.
The only thing Fox retains in this deal are the losses. No IP sticks around, not that they'd want it anyway. Baseball has nothing to do with suspension.
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working...
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working on I'd 100% be fired (and maybe a lawsuit would follow).
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working...
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working on I'd 100% be fired (and maybe a lawsuit would follow).
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working...
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working on I'd 100% be fired (and maybe a lawsuit would follow).
Marucci was gaining market share when my girls were done playing ball. But the bat world is nuts over the names Demarini, Louisville Slugger & Easton. You can't get dad to go against 30+ years of bat shaving propaganda. Easton buying the brand and shutting it down to quash competition would make more sense. There is no tech in bats.
2022: Vista Outdoor buys Fox (the other Fox) ($540,000,000)
2023: Fox (this Fox) buys Marucchi (whose logo looks like Manitou and name sounds like Marzucchi, which is how people frequently mispronounce Marzocchi –– which they also own), another baseball bat brand that's not Easton ($572,000,000)
2026: Fox takes a beating (with Easton bats) and sells Marucchi for a ~$400 million (milzucchi) loss
I mean, it's not that confusing... 😆2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)2014: Race Face buys Easton Cycling ($?)...
I mean, it's not that confusing... 😆
2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)
2014: Race Face buys Easton Cycling ($?), Fox buys Race Face and Easton Cycling ($30,000,000)
2016: Easton-Bell Sports sells Bell and Giro (and Blackburn) to Vista Outdoor ($400,000,000)
2022: Vista Outdoor buys Fox (the other Fox) ($540,000,000)
2023: Fox (this Fox) buys Marucchi (whose logo looks like Manitou and name sounds like Marzucchi, which is how people frequently mispronounce Marzocchi –– which they also own), another baseball bat brand that's not Easton ($572,000,000)
2026: Fox takes a beating (with Easton bats) and sells Marucchi for a ~$400 million (milzucchi) loss
I mean, it's not that confusing... 😆2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)2014: Race Face buys Easton Cycling ($?)...
I mean, it's not that confusing... 😆
2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)
2014: Race Face buys Easton Cycling ($?), Fox buys Race Face and Easton Cycling ($30,000,000)
2016: Easton-Bell Sports sells Bell and Giro (and Blackburn) to Vista Outdoor ($400,000,000)
2022: Vista Outdoor buys Fox (the other Fox) ($540,000,000)
2023: Fox (this Fox) buys Marucchi (whose logo looks like Manitou and name sounds like Marzucchi, which is how people frequently mispronounce Marzocchi –– which they also own), another baseball bat brand that's not Easton ($572,000,000)
2026: Fox takes a beating (with Easton bats) and sells Marucchi for a ~$400 million (milzucchi) loss
Ok so part of me just assumed when they bought Easton they had acquired the whole shebang....helmets, baseball bats etc. So they were pretty diverse, but actually they got NONE of that? So what where they doing buying Marucci?! I also just learned they are the "offical bat supplier" for the MLB and they still went nowhere with it?
Also not only does the Marucci M look like Manitou - the text looks sooo much like the Marzocchi font too 😅
I mean, it's not that confusing... 😆2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)2014: Race Face buys Easton Cycling ($?)...
I mean, it's not that confusing... 😆
2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)
2014: Race Face buys Easton Cycling ($?), Fox buys Race Face and Easton Cycling ($30,000,000)
2016: Easton-Bell Sports sells Bell and Giro (and Blackburn) to Vista Outdoor ($400,000,000)
2022: Vista Outdoor buys Fox (the other Fox) ($540,000,000)
2023: Fox (this Fox) buys Marucchi (whose logo looks like Manitou and name sounds like Marzucchi, which is how people frequently mispronounce Marzocchi –– which they also own), another baseball bat brand that's not Easton ($572,000,000)
2026: Fox takes a beating (with Easton bats) and sells Marucchi for a ~$400 million (milzucchi) loss
I mean, it's not that confusing... 😆2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)2014: Race Face buys Easton Cycling ($?)...
I mean, it's not that confusing... 😆
2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)
2014: Race Face buys Easton Cycling ($?), Fox buys Race Face and Easton Cycling ($30,000,000)
2016: Easton-Bell Sports sells Bell and Giro (and Blackburn) to Vista Outdoor ($400,000,000)
2022: Vista Outdoor buys Fox (the other Fox) ($540,000,000)
2023: Fox (this Fox) buys Marucchi (whose logo looks like Manitou and name sounds like Marzucchi, which is how people frequently mispronounce Marzocchi –– which they also own), another baseball bat brand that's not Easton ($572,000,000)
2026: Fox takes a beating (with Easton bats) and sells Marucchi for a ~$400 million (milzucchi) loss
It must have been the Lizard Skins connection that sealed the deal. Bikes and bats united by grippy tape.
The Marucci origin story is pretty interesting from an American success story perspective. How I Built This podcast from late '24.
If you're an old baseball dork like me, then you've probably seen @baseballbatbros on IG, but if not, it's interesting to see how different bats perform. There is some tech in there, and exit velocity has gone crazy.
In 2014 Easton softball bats were being made once a month at the tubing plant in Connecticut that Cannondale abandoned in 2009, because Easton stopped manufacturing in America in 2003, but their bat designers wanted to try something innovative for elite collegiate athletes that they couldn’t meet MOQ’s on for overseas production.
It’s really a shame that there is currently no viable source of precision butted aluminum profiles available in America(outside of machines in reserve at Boeing to keep B52 toilets running), especially since the bike industry has finally been forced (by athlete feedback!) to start racing aluminum DH bikes again. I sure wish i could buy one of those Santa Barbara built Zink dh bikes without knowing that all the “cool tubes” had to be imported from Taiwan….
The Bikenomics 2014 angle here:In 2014 Easton softball bats were being made once a month at the tubing plant in Connecticut that Cannondale abandoned in 2009...
The Bikenomics 2014 angle here:
In 2014 Easton softball bats were being made once a month at the tubing plant in Connecticut that Cannondale abandoned in 2009, because Easton stopped manufacturing in America in 2003, but their bat designers wanted to try something innovative for elite collegiate athletes that they couldn’t meet MOQ’s on for overseas production.
It’s really a shame that there is currently no viable source of precision butted aluminum profiles available in America(outside of machines in reserve at Boeing to keep B52 toilets running), especially since the bike industry has finally been forced (by athlete feedback!) to start racing aluminum DH bikes again. I sure wish i could buy one of those Santa Barbara built Zink dh bikes without knowing that all the “cool tubes” had to be imported from Taiwan….
Is that a legit factoid that the only butted tubing manufacturing left in the US is at Boeing for the B52?
I mean, it's not that confusing... 😆2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)2014: Race Face buys Easton Cycling ($?)...
I mean, it's not that confusing... 😆
2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)
2014: Race Face buys Easton Cycling ($?), Fox buys Race Face and Easton Cycling ($30,000,000)
2016: Easton-Bell Sports sells Bell and Giro (and Blackburn) to Vista Outdoor ($400,000,000)
2022: Vista Outdoor buys Fox (the other Fox) ($540,000,000)
2023: Fox (this Fox) buys Marucchi (whose logo looks like Manitou and name sounds like Marzucchi, which is how people frequently mispronounce Marzocchi –– which they also own), another baseball bat brand that's not Easton ($572,000,000)
2026: Fox takes a beating (with Easton bats) and sells Marucchi for a ~$400 million (milzucchi) loss
Is that a legit factoid that the only butted tubing manufacturing left in the US is at Boeing for the B52?
Correct! Boeing bought the drawbenches that lived in Connecticut and also the draw benches from Sapa.
2015 was the last time anything except drawn-over-mandrel straight gauge 6061 has been available domestically. Swaging machines and shops that can dome and swage still exist, if you know where to look.
There might be an automotive muffler plant in Ohio that has a draw bench suitable to the task in mothballs, but the chances of a dusty old mandrel for a Klein downtube being useful, or there being staff members who remembers how to run the machine are pretty darn low.
Outside of Lenz, Ventanna and Frank The Welder and Foes (and some test mule labs) there aren’t any people building 6061 bikes in the USA at this point, due to the inaccessibility of solution heat treat.
Small builders prefer 7000 series material because you can age the weldment in your powdercoat oven… but 7005 raw material isn’t currently formulated at any domestic foundaries, and butting a 7005 downtube requires about 7 anneal cycles versus the same tube in 6061 requiring 3 anneal cycles because of the higher UTS of the 7005 material.
I worked at Fox during the acquisition of Marucchi and can say these were the reasons behind it:
Diversify out of the bicycle industry
During COVID obviously there was a huge boom and bust cycle in the cycling industry and Fox was really just along for the ride. Record quarters followed by huge slumps. The C-suite decided to aquire a company outside of the cycling industry to hedge against further industry specific disruption. The SSG division of fox stands for Speciality Sports Group, and they wanted to cover more than one sport.
There were perceived synergies in the product lines, specifically composite and metallurgical technology as related to the production of alloy bats and bicycle components.
Still a crazy acquisition and loss obviously. I always got a weird vibe from the corporate team while working there. Marucchi operated and essentially a separate entity aside for some engineering team crossover. Fox was determined to grow to a 2 Billion dollar company and they primarily used acquisitions to get there.
Problem for the stock price though is: how do you have faith in this leadership going forward? They just lost you $400m on a business that currently has a $765m market cap and with the revenues and income the way they are, will be dealing with this for years to come. I get that everyone makes mistakes, investing in the future is hard, but this is a very big mistake.
We've seen in the past how leadership changes can dramatically affect a business (and it's stock price).
Problem for the stock price though is: how do you have faith in this leadership going forward? They just lost you $400m on a business that...
Problem for the stock price though is: how do you have faith in this leadership going forward? They just lost you $400m on a business that currently has a $765m market cap and with the revenues and income the way they are, will be dealing with this for years to come. I get that everyone makes mistakes, investing in the future is hard, but this is a very big mistake.
We've seen in the past how leadership changes can dramatically affect a business (and it's stock price).
Well the short answer is they don't. Fox's share price is back to where it was in 2016.
When you lose that much money, it becomes the shareholders problem. Either they remove the executives and board members who did the Marucci deal, or you just move forward. But the company has dropped ~85% in 5 years from their COVID era peak. So they're not far away from having to bring in a turn around merchant.
All depends how the shareholders assess the fallout, and if it's pitchforks or a polite goodbye.
I echo a lot of sentiment in this thread. Big picture, the unit never performed, but the PE firm who is hanging around sure is an interesting throughline here...
What are the odds that Fox withstands this hit alongside what has been happening to them post-COVID? I feel like the only thing I read about them at the moment is them bleeding money.
Posted this early this AM. https://substack.com/home/post/p-217835442I echo a lot of sentiment in this thread. Big picture, the unit never performed, but the PE firm who...
I echo a lot of sentiment in this thread. Big picture, the unit never performed, but the PE firm who is hanging around sure is an interesting throughline here...
Congrats on getting married this week. I thought you should know that the AI art at the top made be barf and I couldn't read your article for fear of seeing more.
Congrats on getting married this week. I thought you should know that the AI art at the top made be barf and I couldn't read your...
Congrats on getting married this week. I thought you should know that the AI art at the top made be barf and I couldn't read your article for fear of seeing more.
So much financial knowledge yet gets married.
Maybe we can get a separate thread to educate us all on prenups.
Kidding aside, congrats. And apart from the AI slop again interesting read.
Posted this early this AM. https://substack.com/home/post/p-217835442I echo a lot of sentiment in this thread. Big picture, the unit never performed, but the PE firm who...
I echo a lot of sentiment in this thread. Big picture, the unit never performed, but the PE firm who is hanging around sure is an interesting throughline here...
Congrats on getting married this week. I thought you should know that the AI art at the top made be barf and I couldn't read your...
Congrats on getting married this week. I thought you should know that the AI art at the top made be barf and I couldn't read your article for fear of seeing more.
This thread is funny.
Not sure if this will be my last post here, but those looking for my thoughts (and accompanying AI generated thumbnails) you know where to look.
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working...
I'm going to try and include both sides of this, but the short answer is if I destroyed this much value in anything I was working on I'd 100% be fired (and maybe a lawsuit would follow).
That shit is how companies go away. Cannondale: “ Let’s build a MX bike “ “ And...
That shit is how companies go away.
Cannondale: “ Let’s build a MX bike “
“ And a four wheeler! “
That bike was a pretty sweet piece though… way ahead of its time. The reversed engine bike. the cylinder head was turned backward which offered better mass centralization and a straight shot for intake… steering head intake, EFI.. Exhaust out the back… electric start. Sorry about the rabbit hole! Lost money on every unit sold
Posted this early this AM. https://substack.com/home/post/p-217835442I echo a lot of sentiment in this thread. Big picture, the unit never performed, but the PE firm who...
I echo a lot of sentiment in this thread. Big picture, the unit never performed, but the PE firm who is hanging around sure is an interesting throughline here...
Congrats on getting married this week. I thought you should know that the AI art at the top made be barf and I couldn't read your...
Congrats on getting married this week. I thought you should know that the AI art at the top made be barf and I couldn't read your article for fear of seeing more.
This thread is funny. Not sure if this will be my last post here, but those looking for my thoughts (and accompanying AI generated thumbnails) you know...
This thread is funny.
Not sure if this will be my last post here, but those looking for my thoughts (and accompanying AI generated thumbnails) you know where to look.
I’ve seen people get fired for selling discounted drinks to their partner.
That shit is how companies go away.
Cannondale: “ Let’s build a MX bike “
“ And a four wheeler! “
This part. It makes me feel like a moron for working so hard at all my shit-paying jobs.
Must be nice to be wildly incompetent and get either no repercussion or... OR maybe a bonus. Just because.
Legal gambling
Business crapshoot
Real life Monopoly
Whatever…
What's the bet that the 2027 Fox 40 will now be priced at $1000000. 😂
Comes with a free t-ball bat for your kid
Searching for new product synergies, the new Fox 40 comes with suspiciously t-ball bat shaped stanchions
Was there any original relationship between the Marucci acquisition and Easton’s historic involvement in baseball?
Easton is part of the Fox group, but I’m unsure of how the brand licensing works, it’s possible they only have Easton cycling.
And design our own engine too...
I've wondered if it would have had a chance if they had used an existing motor from Rotax or something like that..
Marucci was gaining market share when my girls were done playing ball. But the bat world is nuts over the names Demarini, Louisville Slugger & Easton.
You can't get dad to go against 30+ years of bat shaving propaganda.
Easton buying the brand and shutting it down to quash competition would make more sense.
There is no tech in bats.
I mean, it's not that confusing... 😆
2014: Easton-Bell Sports sold its baseball and softball division to Bauer Performance Sports ($330,000,000)
2014: Race Face buys Easton Cycling ($?), Fox buys Race Face and Easton Cycling ($30,000,000)
2016: Easton-Bell Sports sells Bell and Giro (and Blackburn) to Vista Outdoor ($400,000,000)
2020: Rawlings acquired Easton Diamond Sports from Peak Achievement Athletics (formerly Bauer Performance Sports) ($?)
2022: Vista Outdoor buys Fox (the other Fox) ($540,000,000)
2023: Fox (this Fox) buys Marucchi (whose logo looks like Manitou and name sounds like Marzucchi, which is how people frequently mispronounce Marzocchi –– which they also own), another baseball bat brand that's not Easton ($572,000,000)
2026: Fox takes a beating (with Easton bats) and sells Marucchi for a ~$400 million (milzucchi) loss
All time post right here.
Ok so part of me just assumed when they bought Easton they had acquired the whole shebang....helmets, baseball bats etc. So they were pretty diverse, but actually they got NONE of that? So what where they doing buying Marucci?! I also just learned they are the "offical bat supplier" for the MLB and they still went nowhere with it?
Also not only does the Marucci M look like Manitou - the text looks sooo much like the Marzocchi font too 😅
2026: Fox takes a beating (with Easton bats) 🤣
Always fun to look back on the original PR...
https://www.globenewswire.com/news-release/2023/11/15/2780978/27025/en/fox-factory-completes-acquisition-of-marucci-sports.html
Perhaps 1 + 1 does not actually equal 3?
It must have been the Lizard Skins connection that sealed the deal. Bikes and bats united by grippy tape.
The Marucci origin story is pretty interesting from an American success story perspective. How I Built This podcast from late '24.
If you're an old baseball dork like me, then you've probably seen @baseballbatbros on IG, but if not, it's interesting to see how different bats perform. There is some tech in there, and exit velocity has gone crazy.
The Bikenomics 2014 angle here:
In 2014 Easton softball bats were being made once a month at the tubing plant in Connecticut that Cannondale abandoned in 2009, because Easton stopped manufacturing in America in 2003, but their bat designers wanted to try something innovative for elite collegiate athletes that they couldn’t meet MOQ’s on for overseas production.
It’s really a shame that there is currently no viable source of precision butted aluminum profiles available in America(outside of machines in reserve at Boeing to keep B52 toilets running), especially since the bike industry has finally been forced (by athlete feedback!) to start racing aluminum DH bikes again. I sure wish i could buy one of those Santa Barbara built Zink dh bikes without knowing that all the “cool tubes” had to be imported from Taiwan….
Is that a legit factoid that the only butted tubing manufacturing left in the US is at Boeing for the B52?
Correct! Boeing bought the drawbenches that lived in Connecticut and also the draw benches from Sapa.
2015 was the last time anything except drawn-over-mandrel straight gauge 6061 has been available domestically. Swaging machines and shops that can dome and swage still exist, if you know where to look.
There might be an automotive muffler plant in Ohio that has a draw bench suitable to the task in mothballs, but the chances of a dusty old mandrel for a Klein downtube being useful, or there being staff members who remembers how to run the machine are pretty darn low.
Outside of Lenz, Ventanna and Frank The Welder and Foes (and some test mule labs) there aren’t any people building 6061 bikes in the USA at this point, due to the inaccessibility of solution heat treat.
Small builders prefer 7000 series material because you can age the weldment in your powdercoat oven… but 7005 raw material isn’t currently formulated at any domestic foundaries, and butting a 7005 downtube requires about 7 anneal cycles versus the same tube in 6061 requiring 3 anneal cycles because of the higher UTS of the 7005 material.
I worked at Fox during the acquisition of Marucchi and can say these were the reasons behind it:
Diversify out of the bicycle industry
During COVID obviously there was a huge boom and bust cycle in the cycling industry and Fox was really just along for the ride. Record quarters followed by huge slumps. The C-suite decided to aquire a company outside of the cycling industry to hedge against further industry specific disruption. The SSG division of fox stands for Speciality Sports Group, and they wanted to cover more than one sport.
Still a crazy acquisition and loss obviously. I always got a weird vibe from the corporate team while working there. Marucchi operated and essentially a separate entity aside for some engineering team crossover. Fox was determined to grow to a 2 Billion dollar company and they primarily used acquisitions to get there.
Problem for the stock price though is: how do you have faith in this leadership going forward? They just lost you $400m on a business that currently has a $765m market cap and with the revenues and income the way they are, will be dealing with this for years to come. I get that everyone makes mistakes, investing in the future is hard, but this is a very big mistake.
We've seen in the past how leadership changes can dramatically affect a business (and it's stock price).
Well the short answer is they don't. Fox's share price is back to where it was in 2016.
When you lose that much money, it becomes the shareholders problem. Either they remove the executives and board members who did the Marucci deal, or you just move forward. But the company has dropped ~85% in 5 years from their COVID era peak. So they're not far away from having to bring in a turn around merchant.
All depends how the shareholders assess the fallout, and if it's pitchforks or a polite goodbye.
Posted this early this AM. https://substack.com/home/post/p-217835442
I echo a lot of sentiment in this thread. Big picture, the unit never performed, but the PE firm who is hanging around sure is an interesting throughline here...
What are the odds that Fox withstands this hit alongside what has been happening to them post-COVID? I feel like the only thing I read about them at the moment is them bleeding money.
Congrats on getting married this week. I thought you should know that the AI art at the top made be barf and I couldn't read your article for fear of seeing more.
So much financial knowledge yet gets married.
Maybe we can get a separate thread to educate us all on prenups.
Kidding aside, congrats. And apart from the AI slop again interesting read.
This thread is funny.
Not sure if this will be my last post here, but those looking for my thoughts (and accompanying AI generated thumbnails) you know where to look.
Cheers.
That bike was a pretty sweet piece though… way ahead of its time. The reversed engine bike. the cylinder head was turned backward which offered better mass centralization and a straight shot for intake… steering head intake, EFI.. Exhaust out the back… electric start. Sorry about the rabbit hole! Lost money on every unit sold
NO PLEASE STAY
How many times can you guys chase this man away and expect him to come back
Post a reply to: The Bikeconomics (Mega)Thread