LOUISVILLE, Ky. (WDRB) – Hillerich & Bradsby Co. is selling its signature Louisville Slugger brand, ending family ownership in the baseball bat business that dates to the 19th century and grew alongside the rise of professional baseball.
The company's $70 million deal with Wilson Sporting Goods involves the “brand, sales and innovation rights” to Louisville Slugger, whose bats will continue to be manufactured for Wilson at H&B's factory at Eighth and Main streets.
At the same time, H&B plans to shed about 20 percent of its workforce, losing white-collar jobs that will become redundant once the sale closes in the coming months.
Officials with both companies said there are no plans to begin combining the well-known baseball names and that Slugger bats will retain their separate identity.
The sale doesn't affect H&B's ownership of the downtown Slugger museum, which draws an estimated 300,000 people annually, or the company's bionic gloves division and Powerbilt golf brand.
“I don't think that it takes the Louisville out of Louisville Slugger,” John A. Hillerich IV, H&B's chief executive officer, said at a news conference announcing the deal.
“We're going to continue to make the bats right here in downtown Louisville,” he said. “We're continuing to own the factory and the guys down on the floor today are going to be the guys making the bats tomorrow and a year from now and a decade from now.”
But 52 workers, primarily in Louisville, will lose information technology, accounting and other white-collar jobs, Hillerich said. H&B was to begin notifying the employees on Monday.
In all, Hillerich said, 177 of H&B's 273 employees will stay with the company and 44 people will move to Wilson.
“I'm glad that the iconic Louisville Slugger will remain in the city where it was created and nurtured by the entrepreneurial Hillerich family,” Louisville Mayor Greg Fischer said in a statement. “The company's factory and gift shop, an important tourism attraction for our city, will remain on Main Street and continue to be a top destination for people across the globe."
Fischer spokesman Chris Poynter declined to comment when asked about the job losses expected under the deal.
Louisville Slugger's origins date to 1884, when John Andrew “Bud” Hillerich made a bat for Pete Browning of the Louisville Eclipse in the old American Association.
As baseball became a popular part of Americans' sporting life, H&B grew its batmaking operation. The company moved its Louisville Slugger plant to Jeffersonville, Ind., in the 1970s before returning to Louisville in the mid-1990s.
Hillerich said H&B long knew it had the option of selling the Louisville Slugger brand but began serious discussions only fairly recently. An agreement with a potential buyer about 1 ½ years ago fell through; the talks then moved on to other potential buyers, ultimately resulting in the Wilson deal, he said.
“It was not an easy decision, nor one we took lightly,” Hillerich said.
More bat makers and competitors with deeper pockets pushed the small, family-owned company to evaluate its future, Hillerich said. The baseball bat business has become more competitive over the past 15 years as others moved in to an industry once dominated by Louisville Slugger and Easton, he said.
H&B chose to sell Louisville Slugger due to the company's “limited” financial resources, when compared with its larger competitors, Hillerich said. He called Wilson a “natural fit” to buy and grow Slugger because of the company's long history of baseball and softball products, international presence and research and development operations.
Speaking to reporters after the news conference, Hillerich said he looked at other options for strengthening Louisville Slugger's finances while keeping the brand, such as selling part of the company to investors or other licensing deals.
"None of those really were feasible,” Hillerich said. “This was the only way to really do it and get any kind of value for the company, for the brand.”
H&B will invest its proceeds into manufacturing operations at the bat factory, doing a museum “refresh,” paying off debt, growing its bionic glove division and keeping cash on hand for other potential investments, Hillerich said.
H&B shareholders must still approve the deal. Hillerich said a vote could occur within the next few weeks.
Wilson, a division of Finland-based Amer Sports Corp., owns other baseball equipment brands, including DeMarini, which makes composite and aluminum bats at a factory in Oregon; and ATEC, a maker of pitching machines, protective screens and batting tees.
With the addition of the Louisville Slugger brand, Wilson will become the No. 1 baseball equipment company in the world, said Mike Dowse, Wilson's president.
Dowse said he expects the Louisville factory to increase production. The plant currently runs one shift and has "a good amount of capacity to ramp up," Hillerich said.
“The reason for this acquisition is to accelerate the business in Louisville Slugger and we're confident with our track record that we've done that with DeMarini that we can do it with Louisville Slugger as well,” Dowse said.
One area for growth, he said, is in an international market that now accounts for about 10 percent of Louisville Slugger sales.
Dowse said Wilson hasn't yet finalized a business plan that would include estimates on manufacturing increases in Louisville.
“Ultimately our goal is to grow this business and fill more jobs," he said. "So I'd like to hopefully be here a year or two from now saying there's a lot more people being employed by the Louisville Slugger brand.”
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