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NIKE MAKES INROADS INTO IN-LINE, ON-ICE SKATES
Published December 15, 1994
Nike Inc. "is stickhandling into the fast-growing ice and roller hockey market" by proposing to take over Canstar Sports Inc. of Montreal for US$395M in cash -- "its biggest acquisition to date." Observers said the deal gives Canstar access to Nike's "considerable marketing expertise and financial resources," allowing Canstar to "accelerate its growth" in the U.S. market. Canstar manufactures and distributes ice skates and hockey equipment under the Bauer, Micron, Mega, Daoust, Lange, Cooper and Flak names, and in-line roller skates and protective gear under the Bauer label. Canstar's U.S. sales rose 31% in '93 and the company expects a 77% increase in '94. Execs from both companies "lauded the deal" (Heinzl & Gibbon, Toronto GLOBE & MAIL, 12/15). Nike expects the deal to be tendered December 23 with the transaction completed 60-90 days after that. In Montreal, Francois Shalom notes that Nike's ad budget is "nearly as much as Canstar's annual sales" (Montreal GAZETTE, 12/15). Kemper Securities analyst Kevin Dukesherer said the deal "looks like a very good move for both companies" (N.Y. TIMES, 12/15). Nike Chair Philip Knight: "Canstar's dominance in the elite ice skate market is unsurpassed, with more than 70% of NHL players wearing Canstar branded skates. ... We plan to have Canstar continue to operate as an autonomous organization without any change to its structure, operations, management or personnel." Canstar's Icaro Olivieri: "The joining of these two great companies represents one of the most strategic moves in the sporting goods industry" (Nike). Knight and Olivieri will serve as co-chairs of Canstar for at least three years (Mult., 12/15). Nike's stock rose two points closing at 68, while Canstar's stock rose 6 1/8 closing at 19. NEW ENDORSER: Eric Lindros, who wears Bauer skates, now joins the lineup of Nike endorsers (USA TODAY, 12/15).