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Mendieta

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Jilly

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From one of the press releases, it's not just Salomon, but Amer Sports...

AMER SPORTS

Amer Sports (www.amersports.com) is a sporting goods company with
internationally recognized brands including Salomon, Arc'teryx, Peak
Performance, Atomic, Mavic, Suunto, Wilson and Precor. The company's
technically advanced sports equipment, footwear, and apparel improve
performance and increase the enjoyment of sports and outdoor activities. The
Group's business is balanced by its broad portfolio of sports and products and
a presence in all major markets. Amer Sports shares are listed on the Nasdaq
Helsinki stock exchange (AMEAS).

We have the Canadian warehouse down the road here at home.
 
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Mendieta

Mendieta

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From one of the press releases, it's not just Salomon, but Amer Sports...

AMER SPORTS

Amer Sports (www.amersports.com) is a sporting goods company with
internationally recognized brands including Salomon, Arc'teryx, Peak
Performance, Atomic, Mavic, Suunto, Wilson and Precor. The company's
technically advanced sports equipment, footwear, and apparel improve
performance and increase the enjoyment of sports and outdoor activities. The
Group's business is balanced by its broad portfolio of sports and products and
a presence in all major markets. Amer Sports shares are listed on the Nasdaq
Helsinki stock exchange (AMEAS).

We have the Canadian warehouse down the road here at home.

Great point. OMG, between Salomon and Atomic there is quite a bit of brand presence in Ski Racing

upload_2018-9-11_7-58-15.png

https://data.fis-ski.com/alpine-skiing/brand-ranking.html

Where are @Muleski and @ScotsSkier when we need them!
 

Lorenzzo

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Think of all that production moving to China, well that which isn't already there. i.e. Arcteryx.
 

cantunamunch

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Hmm, don't think I like this.

There's something about the original argument that doesn't quite sit right - Chinese consumers are interested in skiing _but_ they're looking to buy brands which are strong in other markets.

Does that sound like an end-around IP issues or what?
 

Muleski

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Interesting. It's business and "money talks" It sounds like they are starting with an offer that's roughly 25% more than the stock currently trades for. They have a Hong Kong based PE firm fronting the cash. All cash deal. So, I'd assume that the 90% of the stockholders would accept and approve the deal. I sure would.

Amer Sports is based in Finland, with a large North American presence in Utah. I have no idea how this will shake out, but I would imagine that they would want to preserve and grow the two ski brands. Good brand names. The top end race product is built in Europe in "race rooms", essentially small specialized factories. Can't see that changing in the near future. Longer term, could all sorts of things happen? Sure. As Lorenzzo notes, manufacturing of most of their product could move almost anywhere. I honestly don't know where all of there skis are currently manufactured. I know about a tiny sliver....the real race product. Not even the consumer race product sold by retailers.

Things have not changed a great deal for either brand under Amer Sport's ownership, at least not that I'm aware of, in terms of the higher end products. It's changed in terms of distribution, and I think that each brand has maintained their independence and "brand" strength pretty well. From a personal standpoint, I have found how they have handled Salomon race ski products in North America confusing at times. Is it here, or not?, etc. But it's big in Europe and big on the WC.

Being owned by a large Chinese concern doesn't make me think of immediate change. Maybe I'm too trusting and not cynical enough! Big world, lots of capital there. Amer Sports has many outdoor brands, and sports brands. The financial press seems to highlight Wilson tennis, and "Salomon shoes." I would be concerned with some cheapened or knocked off Mavic wheels and components.

And of course, we could start the ongoing discussion of just what MH and MS's equipment really is, and just where is it built! Which leads to the conversation of Atomic being a huge Austrian company. Really, is it? The way it has been folded into Amer Sports, it feels that way. Could that change? Guess so. Maybe it's good that Hirscher's career is in it's golden year{s}.

China is a very interesting ski market to watch, for sure. Lots going on there. How that interest converts to acquiring this business at this premium is a bit confusing to me, have to admit. But yes, everything has a price.
 

ski otter 2

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There is so much tension right now over business with China, issues of predatory practices, military build-ups, around national security and technology theft. At first I thought, "Oh no," but then, well, not sure. Outdoor Sports may be about as innocuous and fun as it could get with a China acquisition, at least on the face of it (with my own general ignorance). Maybe some things we could all just enjoy together, like team Atomic, biking & backpacking - right up there with Olympic basketball(?).
 
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AmyPJ

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Noooooo! If they take away the Amer Sports presence here in Ogden, I will NOT be happy.
 
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Mendieta

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Noooooo! If they take away the Amer Sports presence here in Ogden, I will NOT be happy.

Sure they could, but why would they? If you buy a (collection of) brand(s) you want to grow from what you have. Not kill it. If think, as suggested by @Muleski and @DanishRider above, there is a lot of smart money in China these days. I can see a shift in production plants, not as much a shift in brand profiles, etc. I guess in your case, it's a question of what they are doing in Ogden. I certainly hope are, as consumer, overall happy with the changes :)

My 2 cts? China is a market with tremendous potential. I can see how it makes sense to buy some of the top brands, keep them the way they are for the current markets, and deliver a local product based on the same technologies. They are buying decades of top of the line R&D.
 

cantunamunch

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Noooooo! If they take away the Amer Sports presence here in Ogden, I will NOT be happy.

If EDIT: @Mendieta and I are right, that's exactly what they won't do; all the immediate buzzy changes would be on the Chinese side, including sharing of IP to Chinese-market companies not previously associated with any of the brands. The established presence in established markets would be the engine driving all of that home market stuff.

Ah, I see @Mendieta posted similar thoughts.
 

AmyPJ

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Yes, but we all know how corporate HQs can be moved, etc. in these types of acquisitions.
 

Wasatchman

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How that interest converts to acquiring this business at this premium is a bit confusing to me, have to admit. But yes, everything has a price.

I'm also confused at the premium that is being paid here. Sporting goods is a very tough business, and I sure don't get the angle of acquiring it at a pretty sizable premium either. They obviously think they can create a lot of value with this somewhere. I struggle where they would be able to create lots of value on the revenue side. Not sure about creating value on the cost side. One immediately asks the question if they are thinking of shifting a lot of production to China that isn't already there to lower costs? But there is peril in doing that with high end established brands. And it's not like Amer didn't source some things from low cost countries already. @Lorenzzo alluded to it with Arc'teryx. Used to be made exclusively in Canada and now basically all made in low cost East Asian countries. I know some that are super pissed about what happened to Arc'teryx, though many still seem to consider the brand among the best of the best despite the production move. So I suppose it can be done without killing a brand.

Would be interesting to see if they move ski production to China. There was a good debate about the effect on K2 this past summer on a thread. I sure wouldn't feel confident moving production of Atomic skis outside of Austria to some low cost country. Maybe it's just me, but I really feel like the Austrian heritage is a big part of Atomic. Of course Atomic is a small portion of the total Amer. So it may not be the skis where production is being shifted, but other areas of Amer. Still, this is a headscratcher to me.
 
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ScotsSkier

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If EDIT: @Mendieta and I are right, that's exactly what they won't do; all the immediate buzzy changes would be on the Chinese side, including sharing of IP to Chinese-market companies not previously associated with any of the brands. The established presence in established markets would be the engine driving all of that home market stuff.

Ah, I see @Mendieta posted similar thoughts.

DIng DIng! We have a winner. I suspect quite straightforward. Basically buying the IP, worth the premium. Move production for Asia and the home market to china. Keep a European foothold as an either way bet to circumvent tariffs from the US. And of cours ramp up the investment in soft goods - footwear and clothing - to drive growth. And of course as with so many Chinese acquisitions the financial model is not necessarily the same as we would normally expect for a pubPic company
 

Wasatchman

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DIng DIng! We have a winner. I suspect quite straightforward. Basically buying the IP, worth the premium. Move production for Asia and the home market to china. Keep a European foothold as an either way bet to circumvent tariffs from the US. And of cours ramp up the investment in soft goods - footwear and clothing - to drive growth. And of course as with so many Chinese acquisitions the financial model is not necessarily the same as we would normally expect for a pubPic company

Why is the IP worth that kind of premium? Is it because the acquirer thinks they can dramatically increase sales to China with the acquisition?
 

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