Dalton, Georgia – A $30-million (€27-million) judgment in a patent infringement lawsuit has led to the sale of AstroTurf LLC, manufacturer of artificial athletic surfacing AstroTurf and artificial landscaping turf SYNLawn.
Burgheim, Germany-headquartered SportGroup Holding GmbH announced the $92.5 million acquisition of Dalton, Ga.-based AstroTurf June 28, the same day AstroTurf filed for Chapter 11 reorganisation before the US Bankruptcy Court for the Northern District of Georgia.
In June 2010, FieldTurf USA Inc. and FieldTurf Tarkett Inc. filed suit against AstroTurf in the US District Court for the Eastern District of Michigan, according to the court document filed by Sean Harding, AstroTurf chief restructuring officer.
FieldTurf claimed AstroTurf infringed on FieldTurf's patent for synthetic grass, the document said. In October 2015, the jury found in FieldTurf's favor and awarded FieldTurf $30 million in damages.
FieldTurf has since filed for enhanced damages and pre-judgment interest, which AstroTurf opposes, according to the court filing. In addition to the judgment, AstroTurf owes nearly $37.8 million to its majority equity holder, Textile Management Associates Inc., under an amended loan agreement made in January 2014, it said.
“I have been advised that in order to stay execution of a judgment pending appeal, the debtor (AstroTurf) would need to post a bond,” Harding said in the document. “However, based on my knowledge of the debtor's financial position and resources, the debtor does not have the financial wherewithal to obtain a bond to secure a judgment of $30 million or more.
“After evaluating its alternatives, and in light of the uncertainty and instability caused by the patent litigation, the debtor has determined that a sale of substantially all of its assets ... would result in the best recovery for its stakeholders.”
SportGroup and AstroTurf reached a preliminary agreement on SportGroup's acquisition of AstroTurf in the summer of 2015 and signed a letter of intent that December for SportGroup to purchase AstroTurf for $100 million, according to the court filing. After SportGroup performed due diligence, the price was adjusted to $92.5 million, it said.
In a SportGroup press release, SportGroup CEO Frank Dittrich said he welcomed adding AstroTurf and SYNLawn to SportGroup's product line. Crumb rubber is a major ingredient in AstroTurf, SYNLawn and the products sold by SportGroup.
“AstroTurf is the missing puzzle piece that enables us to cater to North American athletic turf clients,” Dittrich said. “SYNLawn will make SportGroup one of the strongest players in the landscape turf market.”
Heard Smith, chief operating officer of AstroTurf, said his company is eager to join SportGroup. “The union of these brands ushers in the next era of sophisticated sports surfacing for today's highly trained athletes,” he said.
According to SportGroup, the acquisition offers customers many advantages, including:
More US- and European-approved soccer, rugby and football surfaces than ever before;
Top-tier Olympic and World Cup field hockey surfaces;
Industry leading baseball and softball turf systems;
Legendary running track brands from Advanced Polymer Technology (APT); and
The largest and most efficient turf installation force in the world.
AstroTurf and SYNLawn will continue to be manufactured in Dalton, and all its current employees will remain with the organization, SportGroup said. According to the court filing, AstroTurf has 54 employees, including 44 salaried and 10 hourly.
According to the news release, SportGroup was founded in 1969 and has about 1,000 employees in more than 70 countries. It has installed more than 7,000 athletic fields and 16,000 running tracks, and in 2015 had sales of more than $375 million.