Fox Factory Sells Marucci Sports for $225 Million, Applies Proceeds to Debt
Platform Contraction
Company Background
Fox Factory Holding Corp. designs and manufactures premium suspension, shock, and performance-products for powered vehicles, bicycles, and specialty sports applications under brands including FOX and Method Race Wheels. The Duluth, Georgia company — with a market cap of approximately $778 million — generated $1.47 billion in net sales for fiscal year 2025 and reported an adjusted EBITDA of $168 million, but recorded a GAAP net loss of $545 million, driven almost entirely by $557 million in goodwill impairment charges triggered by sustained stock-price declines following U.S. tariff policy changes.
The company entered fiscal 2026 under dual pressure: elevated leverage and activist scrutiny. In February 2026, Engine Capital LP — which had been pushing for operational improvements — secured a cooperation agreement that brought two new independent directors onto the board, created a board-level Transformation Committee, and led to the retirement of two incumbent directors. At the same time, management launched Phase 2 of a profit optimization program targeting approximately $40 million in incremental savings, on top of roughly $25 million delivered in 2025.
Leverage has been a persistent concern. Fox amended its credit agreement in October 2025 (the Fifth Amendment), replacing its then-existing term loan with a new $537.5 million term loan and $500 million revolving facility maturing October 2030. In May 2026, it negotiated a Sixth Amendment that expanded the maximum net leverage covenant to 5.0 times through a Covenant Relief Period ending June 30, 2028, providing additional headroom as the company's transformation continued. As of July 3, 2026, net leverage stood at 3.7 times and total debt was $667.7 million.
What Was Disclosed
Fox Factory sold Wheelhouse Holdings Inc. — the parent company of Marucci Sports LLC, a designer and marketer of premium baseball bats and diamond sports equipment — to Squared Up Holdings, LLC for a total enterprise value of $225 million. Squared Up Holdings is an acquisition vehicle led by and including members of Marucci's existing senior management team; those management participants were walled off from the company's evaluation of competing proposals. The $200 million cash portion was received at closing and applied in full to reduce outstanding borrowings under Fox's credit facility; approximately $7.5 million in transaction-related costs will be paid separately from cash on hand.