In a merger that creates the country's biggest bowling-alley company, the owners of AMF Bowling Centers Inc. have bought a controlling stake in Hunt Valley-based Fair Lanes Inc., officials said yesterday.
The deal, which gives the investors management control, generates more uncertainty at Fair Lanes, which was founded in Baltimore in 1923. In the past five years the area's dominant bowling chain has been through a leveraged buyout, a bankruptcy and several presidents.
It's unclear whether yesterday's news represents the 10th frame or the reset button for Fair Lanes' headquarters and identity.
Beverley W. Armstrong, vice chairman of AMF Bowling Centers Inc., said the new owners haven't decided whether to keep the Fair Lanes name or how the company's home office will be affected. Fair Lanes President R. Wayne Strausburg, who left town yesterday to spread the word to bowling-center managers, was unavailable for comment.
In a letter to employees, Mr. Strausburg said the merger is "the start of what I believe will be a new beginning for Fair Lanes."
The AMF shareholders, who already owned about 60 percent of Fair Lanes' stock, bought another big chunk from New York-based Balfour Investors yesterday, inflating the stake past 90 percent. The price was not disclosed.
Under Maryland law, the investment group needed two-thirds of Fair Lanes' shares to take control, said Mr. Armstrong, who is a member of the group.
The Fair Lanes purchase fills gaps in Richmond, Va.-based AMF's coverage, he added.
"We are heavily concentrated in the Southeast and Northeast. Fair Lanes is heavily concentrated in the Delaware-Washington-Baltimore area," he said. "It's a business we know. We like the leisure industry. It represented something we could invest in that was as extensive as something we already owned."
Fair Lanes owns 106 centers, including more than 30 in the Baltimore-Washington area. AMF owns 109 U.S. bowling alleys and 79 overseas. Lake Forest, Ill.-based Brunswick Corp. is now the No. 2 chain, with about 125 centers.
The AMF shareholders own another company, also with the AMF name, that makes bowling balls and other sports equipment.
None of Fair Lanes' centers competes with AMF's centers to the extent that facilities will need to close, Mr. Armstrong said. The AMF shareholders do not believe that they need approval of the deal from federal antitrust officials, he said.
Together, Fair Lanes' and AMF's bowling centers will have annual revenue of more than $200 million.
The merger announced yesterday resulted from a chain of events stretching back to 1989, when Los Angeles-based investment group Deutschman Clayton & Co., helped by investment bank Drexel Burnham Lambert, bought Fair Lanes for about $200 million, most of it borrowed money.
The company struggled under the debt, and eventually Deutschman Clayton partner Mac Clayton took over as president. Last year he pushed Fair Lanes quickly through bankruptcy court, wiping out Deutschman Clayton's stake and turning the company over to creditors.
The AMF shareholders bought their initial Fair Lanes stake last summer. Balfour Investors had been a Fair Lanes creditor.