Jun 6, 2018

MLB buys the company that makes its baseballs

Boston Red Sox outfielder J.D. Mertinez hits a home run. Photo by Matthew J. Lee/The Boston Globe via Getty Images

Private equity firm Seidler Equity Partners and Major League Baseball agreed to jointly buy Rawlings, a St. Louis-based sporting goods and equipment maker, from Newell Brands for $395 million.

Why it's a big deal: Because MLB is three years into a home run surge that many believe is enabled by juiced baseballs, which are made by Rawlings. MLB has said its testing shows no such alterations, but also has the rhetorical "out" that it isn't the manufacturer. This deal eliminates that arms-length plausible deniability.

Rawlings generated around $330 million in revenue last year. Newell acquired it via the $13 billion purchase of Jarden in 2016, and is divesting as part of a larger debt-reduction plan.

Bottom line, per WSJ's Maria Armental: "Rawlings, which is credited with introducing the first football shoulder pads, traces its roots to a small store in St. Louis opened by brothers George and Alfred Rawlings. Its gloves have been worn by baseball greats like Roberto Clemente and Mickey Mantle. And Rawlings baseballs have been the official, and exclusive, game balls since 1977."

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