Earlier this week Performance Sports Group Ltd. (TSX:PSG)(NYSE:PSG), the parent of Bauer hockey equipment, had its shares suspended from trading by the TSX until the exchange could review the matter to determine whether the company still met its listing requirements.

The big problem: On October 31, Performance filed for bankruptcy protection in both Canada and the U.S., claiming liabilities between $500 million and $1 billion.

While it doesn’t look good for those holding PSG common stock, the future for Bauer and all of Performance’s other brands, including Easton baseball bats, looks a lot better since Fairfax Financial Holdings Ltd. (TSX:FFH) and Brookfield Asset Management Inc. got involved late last week in negotiations with Sagard Capital, Performance’s largest shareholder and the private equity arm of the Power Corporation of Canada.

Put Prem Watsa, Bruce Flatt, and Paul Desmarais III in a room, and nine times out of 10 you’re going to get a deal done.

According to the Financial Post, Sagard and Fairfax have a “stalking horse” bid that will see the investor group pay US$575 million for Performance’s assets. That puts a floor on the value of the assets. Other bids must be in by January 4, 2017.

The company is also to be provided with $386 million in debtor-in-possession financing from Fairfax and company so it can keep operating. Hockey fans around the country can breathe a sigh of relief that Bauer skates will continue to line the shelves of sporting goods stores everywhere.

This deal for Performance comes fresh off Prem Watsa’s purchase of Golf Town in September in partnership with CI Financial Corp.

Many investors might not realize it, but Fairfax has a pretty big investment in the retail sector including a 75% interest in Sporting Life–a Toronto sporting goods institution that Watsa acquired in 2011 and has been busy expanding ever since. After all of the upset caused sporting goods manufacturers by Sports Authority’s bankruptcy and subsequent closing in the U.S., the move to keep Bauer alive and kicking makes total business sense because it ostensibly provides Sporting Life with an in-house sporting goods brand.

What does this mean for Fairfax’s stock price? Right now, not much. First, Performance has to wind its way through the bankruptcy process, and while I’m not an expert on these types of proceedings, I do know that a court has to approve both the asset purchase agreement and debtor-in-possession financing, which should happen a week or so after all the bids for Performance’s assets are in.

However, if successful, this could be another valuable addition to its non-insurance restaurant and retail holdings, which generated $62 million in pre-tax income in 2015 from $783 million in revenue, up from $17 million in pre-tax income and $556 million in revenue the year before. A deal for Performance could put that number over $1 billion.

Yes, it’s a small pittance to the $625 million in pre-tax income for all of Fairfax in 2015, but it’s getting bigger by the day.

If Watsa can pull off the kind of returns generated by Fairfax’s purchase and subsequent sale of its 74% stake in Ridley Inc., a Minnesota-based animal nutrition company—compound annual return of 31% over seven years—Fairfax shareholders won’t have anything to worry about.

Between this potential deal, Fairfax’s recent announcement to buy some of AIG’s European and Latin American insurance operations and all the good stuff happening in India, there’s plenty to drive Fairfax to new highs—sooner rather than later.

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Fool contributor Will Ashworth has no position in any stocks mentioned. The Motley Fool owns shares of BROOKFIELD ASSET MANAGEMENT INC. CL.A LV. Fairfax Financial is a recommendation of Stock Advisor Canada.