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Industry News

New Client Intake

Athletic Venture Advisors will be accepting new startup and small business clients for consulting on many services including seeking investors and capital. We focus on sports, sporting goods, sports technology, fitness, nutrition, healthcare and injury prevention companies who are making a difference in their field.

AVA will be closing on some major projects very soon, as well as bringing on new advisors to expand our reach.

Because of this we will be bringing on new Startup and Small Business Clients who are preparing and seeking Funding or looking for assistance in Business Development and Strategic Partnerships. Have an interesting business in Sports, Sports-Tech, Healthcare, Fitness and Nutrition or related channels? Submit your business profile here:

Athletic Venture Advisors – Portfolio Partners

Athletic Venture Advisors is growing and adding new Investors to our portfolio.


Toronto, Ontario, Canada – April 1, 2019: Athletic Venture Advisors has seen a significant growth in the interest of Funds seeking our assistance, guidance and expertise in the fields of Sports, Sport Technology, Health & Wellness, Consumer Electronics, Fitness and more. AVA are proud to work with some of the biggest players in these spaces, and are seeking to add to our network.

“We are pleasantly surprised at the willingness, openness and collaboration that happens in this industry. I think it’s exciting for everyone involved, and I believe that everyone we have met is here for the same reason; We love seeing new ideas come to life”


Marc Wilson, Founder of Athletic Venture Advisors

As the company develops new services, partnerships and clients there is a need for partners who operate at various levels of investment in the industry as well as advisors to grow the network of funds and opportunities.

If you are interested in joining the Athletic Venture Advisors network of investors, partners and clients please fill out the following form so that services and opportunities are a valuable fit for your business.

About Athletic Venture Advisors:

Founded in 2018, AVA was created by entrepreneurs who navigated the sports industry, that wanted to make sure that opportunities that further the growth of the industry are seen and supported. AVA boasts a network of Entrepreneurs, Advisors, Funds, Investors, Athletes and Industry Experts who have the resources and networks so cultivate investment and strategic partnership opportunities in sports and sports technology.

For more information:
MEDIA CONTACT:
Marc Wilson
519-870-1817
info@athleticventureadvisors.com

Athletic-Minded Businesses seek like-minded investors.

Entrepreneurial-Athletes seek like-minded Businesses.

Fund Directors seek opportunities in this lucrative market.

Combat gear maker Hayabusa secures financing from BDC

BDC Capital has provided undisclosed mezzanine financing to Hayabusa, a Kingston, Ontario-based designer and maker of equipment and apparel for boxing, jiu-jitsu, Muay Thai and other combat sports.

BDC made the investment through its growth and transition capital group.

Founded in 2006, Hayabusa’s products are used by both fitness enthusiasts and professionals. Last year, the company moved to a primarily direct-to-consumer sales model through its online store.

Hayabusa will use the funds raised for working capital, with a focus on producing inventory required to ramp up sales in the fitness training market.

PRESS RELEASE

Combat Equipment and Apparel Maker Hayabusa Secures Mezzanine Financing From BDC Capital

Ottawa, January 28, 2019 – BDC Capital’s Growth and Transition Capital division has provided mezzanine financing to Hayabusa of Kingston, Ontario. Founded in 2006, Hayabusa designs and manufactures high-quality equipment and apparel for boxing, jiu-jitsu, Muay Thai and other combat sports. Its products, which are recognized as some of the safest in the world, are used by fitness enthusiasts and professionals alike.

BDC Capital’s financing will serve as working capital to support Hayabusa’s growth as it aims to take advantage of the increasing popularity of combat sports as a form of fitness training among the general public. The company will principally use the funds to produce the inventory required to ramp up sales in that segment.

BDC Capital’s lead on this deal was Laura-Lee Brenneman, Director, Growth & Transition Capital, Ottawa. “We’re impressed by the energy and passion of Hayabusa’s management team and by its drive to create some of the safest and most innovative products in this space,” says Brenneman. “Last year, the company pivoted to a primarily direct-to-consumer sales model via the company’s own online store, which led to its highest yearly revenues yet.”

“BDC Capital understands the needs and challenges that face companies such as ours in a rapidly changing retail environment,” says Craig Clement, Hayabusa’s Co-president and CFO. “They treat their clients as true partners and help them succeed by truly recognizing their potential and working alongside them to realize it.”

About Hayabusa
Hayabusa (pronounced hi-ya-boo-sa) is highly regarded as the gold standard in combat equipment and apparel. Hayabusa possesses a relentless commitment and passion to produce only the highest calibre products in terms of both safety and performance, to help inspire athletes in their journey to becoming better, healthier and stronger.

About BDC Capital
BDC Capital is the investment arm of BDC- Canada’s only bank devoted exclusively to entrepreneurs. With $3 billion under management, BDC Capital serves as a strategic partner to the country’s most innovative firms. It offers a full spectrum of risk capital, from seed investments to transition capital, supporting Canadian entrepreneurs who wish to scale their businesses into global champions. Visit bdc.ca/capital.

Contacts:

BDC Capital
Joanne Lajeunesse
Media Relations, BDC Capital
mediainfo@bdc.ca
1-844-625-8321

Hayabusa
Craig Clement, CPA CA
Co-President, CFO
craig@hayabusafight.com
1-888-776-1662, ext. 401

SOURCE: PEHUB

URL: https://www.pehub.com/canada/2019/01/combat-gear-maker-hayabusa-secures-financing-from-bdc/

ESPN’s Ex-President Wants to Build the Netflix of Sports

After an abrupt departure, John Skipper is trying to beat his former employer at its own game. By: Ira Boudway

On a recent fall morning, John Skipper is backstage at Madison Square Garden’s Hulu Theater, a 5,600-seat space tucked beneath the famous New York City arena. He’s there to greet Canelo Alvarez, the red-headed Mexican boxer whose only loss in 53 professional fights was to Floyd Mayweather in 2013. Skipper, the executive chairman of sports media startup DAZN Group, has just signed Alvarez to the richest athlete contract in sports history, a $365 million agreement for the rights to broadcast his next 11 fights. In a few minutes the two will wind through hallways and stairwells to the stage, where Alvarez will pose chest-to-chest before the press with his upcoming opponent, Rocky Fielding of Liverpool.

In the meantime, Alvarez, in a dark vest and white button-up shirt, is autographing boxing gloves, pulling them from a pile of 300 and dropping each finished pair into a large cardboard box. When Skipper approaches, Alvarez pauses. “Thank you for being here. We are very excited about the deal,” Skipper says, shaking hands. “Muchas gracias.”

It’s a big moment for Alvarez, yet Skipper seems the more thrilled of the two. For him, the hoopla marks a big step forward in his comeback from a public stumble. “Today is a lot of adrenaline,” he says prior to heading onstage.

In October, Skipper signed Alvarez to an 11-fight, $365 million contract.PHOTOGRAPHER: AMANDA WESTCOTT/DAZN

A year earlier, Skipper was president of ESPN and one of the most powerful people in television. In his six years on the job and 20 at the network, he helped build it into a $10 billion juggernaut for Walt Disney Co., cutting massive checks to the NBA and NFL and running the machinery that helps turn professional athletes into household names.

Skipper had signed a contract that November to stay on for three more years. ESPN was starting to look vulnerable as consumers abandoned cable TV, and Disney Chief Executive Officer Bob Iger wanted him at the helm as the network began the shift to a digital streaming economy. A month later, at ESPN’s headquarters in Bristol, Conn., Skipper sat in front of about 450 on-camera reporters, analysts, and anchors and told them his plans. “I want to lead an ESPN that strives purposely and confidently into a new world, which is not scary but exciting,” he said.

Less than a week later, he resigned. “I have struggled for many years with a substance addiction,” Skipper said in a statement announcing his departure. “I have decided that the most important thing I can do right now is to take care of my problem.”

The sudden exit fueled speculation that the addiction story was cover for a sexual harassment scandal. The #MeToo movement had already ended the careers of Charlie Rose, Matt Lauer, and other media stars. Fox Sports radio personality Clay Travis, an ESPN critic, tweeted a surreptitious photo of Skipper at a bar with a martini glass at his elbow less than two weeks after his resignation. “ESPN lied about John Skipper’s substance addiction to cover up the real reason he was being fired,” Travis wrote, suggesting that if Skipper had an issue, he wouldn’t be drinking in public. Skipper tried to set the record straight in a March 2018 interview with the Hollywood Reporter. “Someone from whom I bought cocaine attempted to extort me,” he said. When he met with Iger about it, they agreed he should resign.

Backstage at the Garden, Skipper makes clear that he’s not interested in rehashing the extortion plot—which, he says, was the sole reason he left. “What I told people was the truth,” he says in a slight drawl, a remnant of his North Carolina upbringing. “Why they don’t choose to believe it, I have no clue.”

What does interest him is an article about his ambitious second act, which is why he’s letting me hang around. Skipper, 63, spent his early career at Rolling Stone and Spinand helped start ESPN the Magazine. He knows a little scenery helps a story, so he’s chosen this dressing room chat as a table setter for two later interviews. The story he hopes to tell is about how “the old guy who ran ESPN” is now working at a startup that aims to take its place as the “worldwide leader in sports.” He wants to talk about DAZN (pronounced “da zone”), a subscription streaming service with an odd name and big plans to disrupt sports broadcasting. It’s a neat narrative—incumbent turned insurgent—but Skipper knows he’s entering a brutal contest with one of two outcomes: win by knockout or get knocked out.

Skipper won’t call DAZN a “Netflix for sports,” at least not publicly, but it’s useful shorthand. DAZN offers live sports on the internet for a monthly fee. It started in Germany and Japan in summer 2016 and now also operates in Canada, Italy, and the U.S. The German service (which is also available in Austria and Switzerland) offers four of the top European soccer leagues plus the NBA and NFL for about $10 per month. In Japan, subscribers get domestic soccer and baseball, plus MLB, the NFL, three European soccer leagues, and UEFA Champions League, for about $15. U.S. service began in September, offering boxing and mixed martial arts at $10 a month. There are plans to start up in Spain and Brazil later this year.

The goal is to become an indispensable part of sports fans’ entertainment budget. It’s a wildly expensive project. Rights packages for top leagues make the cost for a season of Game of Thrones look like pocket change. And DAZN is competing against many of the biggest media companies in the world, including Disney.

DAZN has a puncher’s chance because it’s backed by Len Blavatnik. The Ukrainian-born media tycoon built a fortune from oil and aluminum dealings in Russia and now oversees a $20 billion empire that includes Warner Music Group. Skipper joined the management team in May, six months after his ESPN exit. The departure was a stroke of good fortune for DAZN: The most plugged-in executive in the business was suddenly available right as the company was looking to crack the U.S. market. “Everybody better be taking them seriously,” says Rich Greenfield, a media analyst at research company BTIG LLC. “They’ve got large amounts of capital and a talented management team that understands all of the problems of the legacy ecosystem.”

DAZN began as part of Perform Group Ltd., a London-based company Blavatnik formed in 2007. Perform built a $450 million business as a middleman for sports content, buying rights to games and data from teams and leagues, then packaging them for broadcasters and bookmakers. In 2014, Perform decided to create its own direct-to-consumer product, setting aside several hundred million dollars to get it off the ground. Consumers were moving to online subscription services for movies, TV, and music. Sports seemed an obvious next step.

Perform picked the name DAZN because it stood out and was available as a trademark across dozens of markets, says Joseph Markowski, executive vice president for North America. And yes, the company is aware that people can’t pronounce it: DAZN’s Twitter feed includes a video of heavyweight fighter Anthony Joshua and other athletes struggling with the name, saying “duh-zin” and “day-zin.” That’s OK, Markowski says—it helps make the name memorable.

DAZN soon went on a multibillion-dollar spending spree. In Japan alone, it committed $3 billion to rights. The splurge didn’t go unnoticed at ESPN, where Skipper was figuring out the direct-to-consumer business. “We were studying the world of platforms that could deliver simultaneous live streams at scale,” he says at DAZN’s Lower Manhattan offices a few weeks after the Alvarez event. The two best in the business, he decided, were Perform Group and BAMTech LLC, a streaming provider that Major League Baseball began developing in 2000.

During the same month that DAZN started in Germany and Japan, Disney paid $1 billion for a one-third share of BAMTech and announced that ESPN would soon operate its first standalone subscription streaming service using BAMTech technology. Then Disney paid an additional $1.6 billion to become BAMTech’s majority owner. Skipper now had the tools to make ESPN a streaming power.

It promised to be a heavy lift. The network couldn’t simply vacuum up rights to the most in-demand sports, put them on a slick online platform, and start charging customers. Although it owned the most valuable portfolio in the U.S.—Skipper himself assembled it, spending about $8 billion annually for Monday Night Football, the NBA, MLB, and many of the most-watched college football and basketball games—ESPN was already selling this programming to pay-TV providers for about $8 per month for every home that got the network. These carrier contracts prevented Skipper from selling the same games directly to consumers.

The number of homes getting ESPN, meanwhile, had fallen from 100 million in 2011 to 87 million in 2017, according to Nielsen Holdings Plc. Even if Skipper could offer the full firehose of ESPN programming via a streaming service, there was little chance of matching the revenue that had flowed through the fast-decaying cable business model. This was the predicament he’d been alluding to when, just before he resigned, he tried to reassure the network’s on-air talent about the “not scary” very scary new world.

PHOTOGRAPHER: BENEDICT EVANS FOR BLOOMBERG BUSINESSWEEK

In the Hollywood Reporter story, Skipper said that after he resigned, he checked himself into a facility where he got to “understand a bit more about substance use.” He told the interviewer, James Andrew Miller, co-author of the bestselling oral history of ESPN, Those Guys Have All the Fun: “I enjoy a martini, I enjoy a bottle of wine with friends for dinner. I’ve never had an issue with alcohol. You know, I’m an old hippie, and then an old New Yorker from the ’80s.” His addiction, he told Miller, had been cocaine.

Skipper’s first job after he finished a master’s in English literature at Columbia University was as a secretary at Rolling Stonein 1979. Over the next decade, he rose to become publisher of US magazine, which was under the same ownership. “He had a lot of friends,” Rolling Stone co-founder Jann Wenner said in Those Guys Have All the Fun. “In those days it was quite the socially intertwined organization, and people had major parts of their social life totally interconnected with the place, you know, free-flowing cocaine, young people intensely involved with their work. And John fit right in with everybody.” Later, when Skipper became one of the most powerful people in sports, an industry full of former jocks and B-school squares, his Rolling Stone background became part of his persona. He was the charismatic Southerner with a countercultural streak.

At a diner on the Upper East Side, not far from where he lives, Skipper remains reluctant to say more about what led to his exit from ESPN. “I regret using the word ‘addiction,’ ” he says. “I had some inappropriate behavior.” As he sees it now, buying cocaine was a manifestation of a deeper set of problems: “I had some underlying matters I needed to deal with, which had created a health problem, which I feel that I’ve satisfactorily resolved.” Is the treatment over? “I’ve turned a new leaf. I feel quite confident in my ability to manage my life in a responsible manner.”

After leaving ESPN, Skipper laid low for a couple of months. He read Under the Volcano by Malcolm Lowry, the story of an alcoholic British diplomat in Mexico, and a Ulysses S. Grant biography. “Taking off is great,” he says, “but when you’re not taking off from anything, you’re not really taking off, you just don’t have anything to do.” When media friends began coming to him for advice, Skipper thought he could make a business of that, but he abandoned the idea after a few days. He didn’t want to tell other people what to do, he realized; he wanted to be the one doing.

In April he had breakfast at the Greenwich Hotel in Manhattan with Simon Denyer, Perform’s CEO and co-founder, who broached the idea of Skipper coming aboard to help run DAZN. “When I looked at what they’ve been able to do in Japan, Germany, and Canada, and thought about being able to try to replicate that around the world, I thought, this is kind of a unique beast,” Skipper says. “We may have the disruptor and the potential winner in this space.” His quick return to the industry was a deliberate statement that he wouldn’t cower. “I wanted to march right back in the room as a chairman of a company and say, ‘I’m fine,’ ” he says.

While he was negotiating his contract with Perform, ESPN introduced its long-awaited standalone streaming service. For $5 a month, subscribers to ESPN+ would get games from MLB, Major League Soccer, and the NHL, as well as some college sports and documentaries and other shows not found on the TV network. The grab bag of second-rate programming highlighted the difficulty ESPN faces as it tries to build a new business while protecting its old one. In September, Disney announced that ESPN+ had a million subscribers.

At DAZN, Skipper faces the flip side of ESPN’s problems. He has the freedom to sell sports directly to viewers but little to sell. ESPN and the other incumbents have locked up the most-watched leagues into the next decade. The NFL’s slate of Sunday games is next available in 2023. NBA games won’t hit the market until 2025. So two days after Skipper’s hire, Perform announced a $1 billion deal with British promoter Matchroom Boxing that would serve as the foundation of its U.S. service.

“I loved being the president of ESPN. But the change has been good to me”

The $365 million agreement with Alvarez and his representatives at Golden Boy Promotions Inc., which came five months later, is part of a larger deal that includes other top boxers in Golden Boy’s stable and could reach a half-billion dollars if the fights draw enough subscribers. “I didn’t know what DAZN was until John Skipper got a hold of me,” says Oscar De La Hoya, the former prizefighter and Golden Boy co-founder. HBO had announced recently that it was dropping boxing coverage from its network. “I have to admit we were pretty desperate at the time,” says De La Hoya. During negotiations in Los Angeles, he says, Skipper asked what the magic number was to get Alvarez: “I threw out a number, and he didn’t blink. What I see in John is ambition—and a little revenge. When he mentioned, ‘Look, we want to compete with ESPN,’ I said, ‘Of course. Bingo.’ ”

A former colleague of Skipper’s who’s spoken with him since he left ESPN (and also is no longer at the network) says Skipper was hurt by how Disney treated him at the end: “He felt like his long service might have suggested a different outcome than ‘goodbye and good luck.’ ” Disney declined to comment.

Skipper says he bears no ill will toward his former employer. His focus is expanding DAZN. “If I have gained some perspective from years of working in sports and years of living,” he says, “it is that you better do things that you enjoy, and you better do them for positive reasons.”

For now the battle for streaming supremacy is happening at the margins of the U.S. market. ESPN has deep cuts from its vast portfolio. NBC Sports has a variety of “gold” packages for fans who can’t get enough English Premier League soccer, PGA Tour golf, or figure skating. AT&T Inc.’s WarnerMedia offers UEFA Champions League and Europa League soccer on B/R Live for $10 per month. Then again, ESPN got its start on the margins. In 1979 it had bowling, billiards, slow-pitch softball—and plenty of doubters who said a 24-hour sports cable network would never work.

Skipper says DAZN is ready to bid on anything and everything that becomes available in the U.S., including the NFL. He expects that leagues will eventually start carving out exclusive rights packages for online-only bidders. In November, DAZN signed a three-year, $300 million agreementwith MLB for a nightly show that will feature live look-ins at games starting this coming season. Between boxing and baseball, DAZN has committed about $2 billion in the U.S., and it’s prepared to spend billions more. To help pay for it, Perform reorganized, changing the company name to DAZN Group and splitting it into the streaming service and the digital sports agency. It’s hired a banker to explore a sale of the latter.

In the long run, success depends on whether DAZN can make more money in subscriber fees than it spends on rights. Regulatory statements filed in the U.K. show that Perform had operating losses of almost $275 million in 2017, mainly because of spending on DAZN, and that was before costs associated with the U.S. introduction. The company doesn’t release subscriber numbers, but Japan, Skipper says, already counts more than a million payers. At the dollar equivalent of about $15 per month per subscription, that’s about $180 million in annual revenue. The global subscriber tally, he says, is past a million by “some multiples.” The goal is to reach profitability in new markets in four or five years, he says.

The closest thing DAZN has to a global rival at the moment is Eleven Sports Network Ltd., a subscription-streaming service in London that operates in 11 markets including the U.K. and the U.S., offering mostly soccer, motor sports, and fights. Eleven, however, lacks Blavatnik’s deep pockets. In December, after reports that it might have to close in the U.K.because of low demand, the company said it was trying to renegotiate its deals with Spanish and Italian soccer leagues.

The real worry for DAZN comes from bigger competitors. Disney’s $71 billion purchase of 21st Century Fox Inc. includes sports channels in India, Latin America, and Asia. “I don’t think it will be very long before ESPN+ becomes a global, standalone sports offering,” says Daniel Cohen, a media rights consultant at the Octagon Inc. sports agency. There’s also the threat that a tech giant will go all-in on sports. If Amazon.com or Facebook Inc. decides to swing for the fences, even Blavatnik’s billions might not be enough to win the day.

On Dec. 15 at Madison Square Garden, one year to the night after the cocaine buy that cost Skipper his ESPN job, Alvarez pounds Fielding into submission in three rounds. The capacity crowd includes Bruce Willis and John McEnroe but not Skipper. A bad back keeps him home for DAZN’s big night. The choice not to push it is part of his new approach to work.

At ESPN, Skipper says, his response to every challenge was the same: “I just worked harder, worked more, worked all the time.” And if he hadn’t slipped up, he probably would have kept at it. “I don’t think I was wise enough to stop,” he says. “I loved being the president of ESPN. But the change has been good to me. Not working for a little while was good to me.”

He exercises more now, he says, and eats better. He’s lost 30 pounds. And even though he’s thrown himself into his job, traveling the world in search of rights, he no longer immerses himself in every detail. “I’ll decide that I’m going to put a little hole in my day and go ride my bike around the park,” he says. “One thing they talk a lot about in therapy is mindfulness. Just be aware of what you’re doing. I was barely aware of what I was doing.”

A friend at ESPN says that after Skipper left the network, he confided that his life there had been lonely; his exit, as embarrassing as it might have been, was a blessing. “He’s happier than I’ve ever seen him,” the friend says. Skipper’s departure led to introspection about his home life, too. In November he and his wife of 39 years divorced. “He’s broken free from both his personal and professional past,” the friend says.

“It’s not anything you would wish on anybody,” Skipper says of the ordeal. He didn’t need the pain it caused his ex-wife and two grown sons, the disruption he caused at ESPN, or the public exposure. Still, he’s comfortable with where he is now. “If I’m in the great gyroscope in the sky somewhere and someone asks, ‘Would you like to turn back and something different happens that day, but you haven’t gotten any smarter?’ … I’d say, ‘Nah.’ I wouldn’t do it. It worked out OK.”

SOURCE: Bloomberg Businessweek https://www.bloomberg.com/

URL: https://www.bloomberg.com/news/features/2019-01-16/espn-s-ex-president-wants-to-build-the-netflix-of-sports

Equity38 invests in fitness training provider TRX

Equity38 LLC has made an investment in TRX, a fitness training provider. No financial terms were disclosed.

PRESS RELEASE

SAN FRANCISCO, Jan. 16, 2019 /PRNewswire/ — TRX® is pleased to announce it has successfully recapitalized the business with a strategic growth capital investment from Equity38, LLC (“Equity38”). Structured as a management buyout of previous investors by Equity38, the partnership was ideal for TRX in that it maintains the company’s existing infrastructure, led by Founder/CEO and former Navy SEAL, Randy Hetrick; while also arming TRX with the capital and significant additional category expertise and resources from Equity38, to further develop the TRX brand and business to an even higher level.

Founded by Hetrick in 2004, TRX is the global leader in functional training solutions and the pioneers behind Suspension Training®, the bodyweight-based exercise method that became a worldwide phenomenon. Equity38 is a consumer-focused private equity firm co-founded in 2018 by Brent Leffel and David Cox. Leffel and Cox bring significant category experience to the partnership, having previously worked as principal investors, c-level executives and board directors with prominent fitness brands that include, New Evolution Ventures UFC GYM, US Fitness, Crunch Fitness, Barry’s Bootcamp and Orange Theory Fitness.

“I couldn’t be more excited to welcome the Equity38 team into the TRX family,” said Hetrick. “This partnership came together in the most organic and serendipitous way imaginable. I asked a longtime industry friend, Leffel, to lend me his expertise to help kickstart a growth initiative we’d been struggling to launch in 2017. He started Equity38 with Cox, midstream through our project, and we were able to put a deal together to recapitalize the company. In addition to arming TRX with a war chest of growth capital, Equity38 brings deep experience in our industry and their active involvement in the business and stewardship will be an important part of our next chapter.”

“I got to know Randy early in my travels through the fitness industry, and I’ve always admired what he has accomplished as an entrepreneur, said Leffel, co-Managing Partner of Equity38. “Randy and his team have built the world’s premier training and education company with a foundation in science-based movement benefiting everyone from novice fitness participants to professional athletes. TRX is a strong brand that is supported by strong macro and micro tailwinds and an unparalleled eco-system of passionate brand supporters, creating a tremendous platform which showcases innovative products and services. Despite its significant growth and global impact, TRX has only begun to scratch the surface of what it can become, and we are excited to lock arms with Randy and his team to realize the brand’s full potential.”

Hetrick created a forerunner to the TRX Suspension Trainer® while deployed to Southeast Asia out of necessity to keep his squadron fit without transporting heavy training equipment to remote locations. After 14 years as a SEAL Officer, culminating his career as Squadron Commander of the SEALs’ elite special missions’ unit, Hetrick attended Stanford University to earn his MBA. At Stanford, Hetrick refined the Suspension Trainer and developed the TRX System after gaining the attention of Stanford athletes, coaches and trainers. TRX revitalized the category of bodyweight training and now provides a full-range of mobile, versatile fitness solutions to health-conscious consumers. The Company’s products are patented, highly portable and provide hundreds of exercises for a total workout experience. Since its inception, TRX has sold millions of units to trainers and clubs around the world and has broadened its product line to include an entire ecosystem of functional training gear, infrastructure, professional education courses and individualized exercise content. It is now poised to add a new range of services and content leveraging its broad reach and significant brand DNA.

ABOUT TRX®
As the global leaders in functional training, the company’s mission is to democratize world class training and enable everyone, everywhere to move better throughout life. TRX develops the world’s best training equipment, workout programs, and education courses to help people of all fitness levels become better versions of themselves. The company is also the industry’s leading provider of specialized education courses for fitness professionals. TRX redefined the application of bodyweight training to enhance human performance and has successfully disrupted the mature landscape of the health club industry.

TRX began in a garage and recently completed its 14th year in the market. With a full-time staff of 100 team members, the brand is also supported by a cadre of 350 certified, contracted master instructors who deliver more than 1,500 ongoing education courses each year to fitness professionals in dozens of countries. During the past decade, TRX qualified more than 300,000 training professionals—who comprise a formidable army of ambassadors around the globe. The brand enjoys the patronage of the top professional athletes in every sport, and its equipment and training philosophy is changing the way that soldiers train for combat, athletes at all levels train for competition and regular people of all ages and abilities train for life. For more information about TRX, please visit www.TRXTraining.com.

ABOUT Equity38
Equity 38 LLC is a boutique principal investment firm focused on lower middle market opportunities in the consumer-facing Health/Wellness, Active Lifestyle, and Outdoor sector. The firm’s Managing Partners have complementary experience as principal investors, entrepreneurs, board members and c-level industry executives. The firm was founded in 2018 by Brent Leffel and David Cox with offices in Newport Beach, CA and Atlanta, GA. Equity38 LLC is currently investing out of its first committed fund. For more information, please visit www.equity38.com.

SOURCE: PE HUB

URL: https://www.pehub.com/2019/01/equity38-invests-in-fitness-training-provider-trx/

VF Reports Third Quarter Fiscal 2019 Results; Raises Full Year Fiscal 2019 Outlook

January 18, 2019

  • Revenue from continuing operations increased 8 percent (up 10 percent in constant dollars) to $3.9 billion; excluding acquisitions net of divestitures, revenue increased 7 percent (up 9 percent in constant dollars);
  • Active segment revenue increased 16 percent (up 18 percent in constant dollars) including a 25 percent (27 percent in constant dollars) increase in Vans® brand revenue; Outdoor segment revenue increased 11 percent (up 12 percent in constant dollars) including a 14 percent (16 percent in constant dollars) increase in The North Face® brand revenue and a 4-percentage point revenue growth contribution from acquisitions;
  • International revenue increased 5 percent (up 9 percent in constant dollars) including a 1-percentage point revenue growth contribution from acquisitions net of divestitures; China revenue increased 18 percent (up 23 percent in constant dollars);
  • Direct-to-consumer revenue increased 10 percent (up 12 percent in constant dollars) including a 1-percentage point revenue growth contribution from acquisitions net of divestitures; Digital revenue increased 24 percent (up 26 percent in constant dollars);
  • Gross margin from continuing operations increased 40 basis points to 51.9 percent; on an adjusted basis, gross margin increased 60 basis points to 52.2 percent;
  • Earnings per share from continuing operations was $1.16. Adjusted earnings per share from continuing operations increased 30 percent (up 31 percent in constant dollars) to $1.31, including a 1-percentage point earnings growth contribution from acquisitions net of divestitures;
  • Full year fiscal 2019 revenue is now expected to increase approximately 12 percent (up 13 percent in constant dollars) to at least $13.8 billion; and,
  • Full year fiscal 2019 adjusted earnings per share is now expected to be $3.73, including an additional $45 million, or $0.09 per share, of incremental investment, reflecting an increase of 19 percent (up 20 percent in constant dollars).

GREENSBORO, N.C.–(BUSINESS WIRE)– VF Corporation (NYSE: VFC) today reported financial results for its third quarter ended December 29, 2018. All per share amounts are presented on a diluted basis. This release refers to “reported” and “constant dollar” amounts, terms that are described under the heading “Constant Currency – Excluding the Impact of Foreign Currency.” Unless otherwise noted, “reported” and “constant dollar” amounts are the same. This release also refers to “continuing” and “discontinued” operations amounts, which are concepts described under the heading “Discontinued Operations – Nautica®Brand Business and Licensing Business.” Unless otherwise noted, results presented are based on continuing operations. This release also refers to “adjusted” amounts, terms that are described under the heading “Adjusted Amounts – Excluding Williamson-Dickie, Icebreaker®Altra®Reef®, and Jeans Spin-Off Transaction and Deal Related Expenses, Costs Related to Office Relocations and the Provisional Impact of U.S. Tax Legislation.” Unless otherwise noted, “reported” and “adjusted” amounts are the same.

“VF’s third quarter results were fueled by strong growth in our largest brands and balanced growth across the core dimensions of our portfolio,” said Steve Rendle, Chairman, President and Chief Executive Officer. “Based on the strength of our third quarter performance and the growth trajectory we see for the remainder of fiscal 2019, we are again increasing our full year outlook, including an additional $45 million of growth-focused investments aimed at accelerating growth and value creation into fiscal year 2020. We remain sharply focused on executing our integrated growth strategy and transforming VF into a purpose-led, performance-driven enterprise committed to delivering superior returns to shareholders.”

Constant Currency – Excluding the Impact of Foreign Currency

This release refers to “reported” amounts in accordance with U.S. generally accepted accounting principles (“GAAP”), which include translation impacts from foreign currency exchange rates. This release also refers to “constant dollar” amounts, which exclude the impact of translating foreign currencies into U.S. dollars. Reconciliations of GAAP measures to constant currency amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management’s view of why this information is useful to investors.

Discontinued Operations – Nautica® Brand Business and Licensing Business

On April 30, 2018, the company completed the sale of its Nautica® brand business. On April 28, 2017, the company completed the sale of its Licensed Sports Group (“LSG”) business, including the Majestic® brand. In conjunction with the LSG divestiture, VF executed its plan to entirely exit the licensing business and completed the sale of the assets of the JanSport® brand collegiate business in the fourth quarter of 2017. Accordingly, the company has included the operating results of these businesses in discontinued operations through their respective dates of sale.

Adjusted Amounts – Excluding Williamson-Dickie, Icebreaker®, Altra®, Reef®, and Jeans Spin-Off Transaction and Deal Related Expenses, Costs Related to Office Relocations and the Provisional Impact of U.S. Tax Legislation

This release refers to adjusted amounts that exclude transaction and deal related expenses associated with the acquisitions and integration of Williamson-Dickie, Icebreaker® and Altra®, and expenses and losses on sale related to the divestitures of the Reef®brand and the Van Moer business, which was acquired in connection with the Williamson-Dickie acquisition. The release also refers to transaction expenses associated with the planned spin-off of the Jeans business. Total transaction and deal related expenses, including the losses on sale, were approximately $63 million in the third quarter of fiscal 2019 and $135 million in the first nine months of fiscal 2019.

This release also refers to adjusted amounts that exclude costs primarily associated with the previously announced relocations of VF’s global headquarters and certain brands to Denver, Colorado. Total costs were approximately $6 million in the third quarter of fiscal 2019 and $17 million in the first nine months of fiscal 2019.

Adjusted amounts in this release also exclude the provisional amounts recorded due to recent U.S. tax legislation. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act. Measurement period adjustments related to the provisional net charge resulted in a net expense of approximately $10 million in the third quarter of fiscal 2019 and $23 million in the first nine months of fiscal 2019.

Combined, the above net charges negatively impacted earnings per share by $0.16 during the third quarter of fiscal 2019 and $0.36 during the first nine months of fiscal 2019. All adjusted amounts referenced herein exclude the effects of these amounts.

Reconciliations of measures calculated in accordance with GAAP to adjusted amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management’s view of why this information is useful to investors.

Third Quarter Fiscal 2019 Income Statement Review

  • Revenue increased 8 percent (up 10 percent in constant dollars) to $3.9 billion. Excluding acquisitions net of divestitures, revenue increased 7 percent (up 9 percent in constant dollars), driven by VF’s largest brands, international and direct-to-consumer platforms, as well as strength from the Active, Outdoor and Work segments.
  • Gross margin increased 40 basis points to 51.9 percent, driven by a mix-shift toward higher margin businesses. On an adjusted basis, gross margin increased 60 basis points to 52.2 percent.
  • Operating income on a reported basis was $592 million. On an adjusted basis, operating income increased 30 percent to $656 million, including a $7 million contribution from acquisitions net of divestitures. Operating margin on a reported basis increased 170 basis points to 15.0 percent. Adjusted operating margin increased 270 basis points to 16.6 percent. Adjusted operating margin, excluding acquisitions net of divestitures, increased 280 basis points to 16.8 percent.
  • Earnings per share was $1.16 on a reported basis. On an adjusted basis, earnings per share increased 30 percent (up 31 percent in constant dollars) to $1.31, including a 1-percentage point growth contribution from acquisitions net of divestitures.

Balance Sheet Highlights

Inventories were up 9 percent compared with the same period last year. Excluding the impact of acquisitions net of divestitures, inventories increased 7 percent. The company also returned approximately $700 million to shareholders through dividends and share repurchases. The company has $3.8 billion remaining under its current share repurchase authorization.

Adjusted Full Year Fiscal 2019 Outlook

The following outlook for fiscal year 2019 is on an adjusted basis and has been updated to include the following:

  • Revenue is now expected to be at least $13.8 billion, reflecting an increase of approximately 12 percent (up 13 percent in constant dollars). This compares to the previous expectation of at least $13.7 billion, which reflected an 11 percent increase. By segment, revenue for Outdoor is now expected to increase 8 percent versus the previous expectation of a 7 percent to 8 percent increase; revenue for Active is now expected to increase 16 percent versus the previous expectation of a 14 percent to 15 percent increase; revenue for Work is now expected to increase 39 percent versus the previous expectation of a more than 35 percent increase; and, revenue for Jeans is now expected to decline 3 percent versus the previous expectation of a 1 percent to 2 percent decline.
  • International revenue is now expected to increase 10 percent to 11 percent (up about 13 percent in constant dollars) versus the previous expectation of a 12 percent to 13 percent increase.
  • Direct-to-consumer revenue is now expected to increase 13 percent (up 14 percent in constant dollars) versus the previous expectation of a 12 percent to 14 percent increase. Digital revenue is still expected to increase more than 30 percent.
  • Adjusted gross margin is expected to be at least 51 percent.
  • Adjusted operating margin is expected to increase 90 basis points to 13.6 percent.
  • Adjusted earnings per share is now expected to be $3.73, including an additional $45 million, or $0.09 per share, of incremental investment, reflecting an increase of 19 percent (up 20 percent in constant dollars). This compares to the previous expectation of $3.65.
  • Cash flow from operations is still expected to approximate $1.8 billion.
  • Other full year assumptions include an effective tax rate of about 16 percent and capital expenditures of approximately $275 million.

Dividend Declared

VF’s Board of Directors declared a quarterly dividend of $0.51 per share, payable on March 18, 2019, to shareholders of record on March 8, 2019.

Webcast Information

VF will host its third quarter fiscal 2019 conference call beginning at 8:30 a.m. Eastern Time today. The conference call will be broadcast live via the Internet, accessible at ir.vfc.com. For those unable to listen to the live broadcast, an archived version will be available at the same location.

Presentation

A presentation on third quarter fiscal 2019 results will be available at ir.vfc.com beginning at approximately 7:30 a.m. Eastern Time today and will be archived at the same location.

About VF

VF Corporation (NYSE: VFC) outfits consumers around the world with its diverse portfolio of iconic lifestyle brands, including Vans®, The North Face®Timberland®, Wrangler®and Lee®. Founded in 1899, VF is one of the world’s largest apparel, footwear and accessories companies with socially and environmentally responsible operations spanning numerous geographies, product categories and distribution channels. VF is committed to delivering innovative products to consumers and creating long-term value for its customers and shareholders. For more information, visit www.vfc.com.

Forward-looking Statements

Certain statements included in this release and attachments are “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as “will,” “anticipate,” “estimate,” “expect,” “should,” and “may” and other words and terms of similar meaning or use of future dates. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of VF to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to: risks associated with the proposed spin-off of our Jeanswear business, including the risk that the spin-off will not be consummated within the anticipated time period or at all; the risk of disruption to our business in connection with the proposed spin-off and that we could lose revenue as a result of such disruption; the risk that the companies resulting from the spin-off do not realize all of the expected benefits of the spin-off; the risk that the spin-off will not be tax-free for U.S. federal income tax purposes; the risk that there will be a loss of synergies from separating the businesses that could negatively impact the balance sheet, profit margins or earnings of both businesses; and the risk that the combined value of the common stock of the two publicly-traded companies will not be equal to or greater than the value of VF Corporation common stock had the spin-off not occurred. There are also risks associated with the relocation of our global headquarters and a number of brands to the metro Denver area, including the risk of significant disruption to our operations, the temporary diversion of management resources and loss of key employees who have substantial experience and expertise in our business, the risk that we may encounter difficulties retaining employees who elect to transfer and attracting new talent in the Denver area to replace our employees who are unwilling to relocate, the risk that the relocation may involve significant additional costs to us and that the expected benefits of the move may not be fully realized. Other risks include foreign currency fluctuations; the level of consumer demand for apparel, footwear and accessories; disruption to VF’s distribution system; VF’s reliance on a small number of large customers; the financial strength of VF’s customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; VF’s response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior, intense competition from online retailers, manufacturing and product innovation; increasing pressure on margins; VF’s ability to implement its business strategy; VF’s ability to grow its international and direct-to-consumer businesses; VF’s and its vendors’ ability to maintain the strength and security of information technology systems; the risk that VF’s facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss; VF’s ability to properly collect, use, manage and secure consumer and employee data; stability of VF’s manufacturing facilities and foreign suppliers; continued use by VF’s suppliers of ethical business practices; VF’s ability to accurately forecast demand for products; continuity of members of VF’s management; VF’s ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; maintenance by VF’s licensees and distributors of the value of VF’s brands; VF’s ability to execute and integrate acquisitions; changes in tax laws and liabilities; legal, regulatory, political and economic risks; the risk of economic uncertainty associated with the pending exit of the United Kingdom from the European Union (“Brexit”) or any other similar referendums that may be held; and adverse or unexpected weather conditions. More information on potential factors that could affect VF’s financial results is included from time to time in VF’s public reports filed with the Securities and Exchange Commission, including VF’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190118005061/en/

VF Corporation
Joe Alkire, 336-424-7711
Vice President, Corporate Development, Investor Relations and
Financial Planning & Analysis
or
Craig Hodges, 336-424-5636
Vice President, Corporate Affairs

Source: VF Corporation

Released January 18, 2019

OVERACTIVE MEDIA GROUP Raises over $22 Million in New Round of Funding

Toronto-based esports organization expects to close Splyce acquisition; adds more investors to their roster

January 14, 2019 (TORONTO, CANADA) — OverActive Media (“OAM”), announced today it has closed its latest round of equity funding, raising over $22 million. The announcement follows OAM’s $21.5M initial round of equity funding closed in October, 2018. The proceeds from the funding will be used to fund the operations of OAM’s Toronto Defiant Overwatch League franchise; to fund OAM’s Splyce-branded franchise in the League of Legends European Championship (“LEC”);  to finalize OAM’s acquisition of Splyce Inc.;  and for general working capital and business development purposes.

This new round of funding was completed by current and new shareholders, including institutional, corporate and private investors. It was completed on a non-brokered basis.

“This is another key milestone in the evolution of OverActive Media into a premier global esports ownership platform,” said Chris Overholt, President and CEO of OverActive Media. “We are humbled by the enthusiastic response from investors and partners around the world. We look forward to pushing ahead with our core franchise strategy, and to building out our already-strong fan communities with our players, sponsors and partners.”

In November, OAM announced it had entered into an Agreement in Principle to acquire global esports stalwart, Splyce Inc. (“Splyce”). The deal saw OAM take ownership of multiple international esports teams including the newly-awarded Splyce franchise in the LEC. The acquisition is expected to close in the next thirty days.

OverActive owns the Toronto Defiant of the Overwatch League and a franchise in the European League of Legends. In addition, OverActive has competitive teams that participate in a number of different titles, including: Call of DutySmite, Rocket League and Starcraft II.

Paulo SenraVice President, Content and Communications, OverActive Media

ABOUT OVERACTIVE MEDIA GROUP

OverActive Media Group (“OAM”) is an integrated company delivering esports and video game entertainment. We’re combining team ownership with audience engagement to better connect with our fans, franchise partners and corporate sponsors around the world. OAM is headquartered in Toronto, Ontario, Canada. OAM owns the Toronto Defiant of the Overwatch League, a League of Legends European Championship series franchise and Splyce Inc.

ABOUT SPLYCE:

Splyce, founded in 2015, is home to top level teams across multiple esports titles around the globe. Since its inception, the organization has grown to include teams in League of LegendsCall of DutyRocket LeagueStarcraft IIHaloSmite and Paladins.

Splyce is headquartered in Rochester, NY with a global reach, with players and staff based out of Europe, North America and Asia. By investing in quality resources, infrastructure and support for our teams, we create a solid platform for players to devote themselves to competition and also set the standard for the rest of the industry. We seek to foster talent and build the best teams possible through hard work and innovation.

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