Platinum Equity and its portfolio company, PlayPower, have abandoned their proposed purchase of rival playground maker BCI Burke, the Federal Trade Commission said Tuesday. The decision came after the FTC and a dozen states sued last week to block the deal.
Daniel Guarnera, director of the FTC’s Bureau of Competition, said in a statement that the outcome is “a win for American consumers.” He said it will help drive down prices paid by schools, churches, daycares and parks departments. He said state and municipal governments spend hundreds of millions of dollars on playground equipment every year, so taxpayers are among the biggest beneficiaries of continued competition between PlayPower and Burke.
According to Guarnera, the five largest manufacturers of commercial outdoor playground equipment, including PlayPower and Burke, control 85% to 90% of that market. He said the proposed merger was the latest in a series of acquisitions by PlayPower. It would have cut the number of major competitors from five to four, he said, and given PlayPower’s owners control of more than 30% of the relevant market.
Guarnera said smaller manufacturers could not be expected to fill the gap. He said those companies often lack the distribution channels, sales representatives, safety certifications, manufacturing capacity and product portfolios needed to replace the competition that would have been lost.
He also said tens of millions of children and their families would benefit from higher quality, better service and more playground innovation. The statement did not describe those expected benefits in more detail.
Guarnera thanked FTC staff for assembling what he called an “overwhelming evidentiary record,” and thanked the state partners for working with the agency. He said the FTC will continue to protect consumers from deals that raise prices, hurt quality and reduce innovation.
The statement did not say when the companies decided to drop the deal. It also did not say what happens next with the lawsuit. The FTC referred readers to its earlier press release announcing the suit to block the acquisition.