Through a merger with Yucaipa Acquisition Corporation, a U.S. special purpose acquisition company, the previously indicated IPO (see SGI Europe) of Berlin-based Signa Sports United (SSU), led by Austrian investor Rene Benko, will now proceed faster than anticipated. According to a projected valuation, the combined company is expected to reach a total value of $3.2 billion. This results in part from the fact that the transaction includes a growth capital raise totaling $645 million from cash from Yucaipa and a cash capital raise in the form of a $300 million private investment (including $50 million from Yucaipa’s founder, Ron Burkle).
At the same time, SSU is acquiring U.K.-based Wiggle CRC, the second-largest online bike retailer globally, which also serves the running, fitness, outdoor and swimming segments. SSU is already active in the bike segment with its bicycle online shops Fahrrad.de and Bikester. The Wiggle deal will make SSU about four times larger in the bike sector than fellow e-commerce giant Bike24, which was owned by Wiggle from 2017 until 2019 and is now itself in the process of listing its shares in Frankfurt.
SSU claims the transactions will make it the world’s largest sports e-commerce and technology platform company, serving over 7 million active customers, 1,000+ brand partners, 500+ connected retail stores and more than 15 million sports community users globally.
“We’re proud and excited by this next chapter in SSU’s growth story. Becoming a listed company allows us to continue capturing market share in Europe and to accelerate our U.S. and international expansion while scaling our platform solutions,” said Stephan Zoll, CEO of SSU. “We also look forward to welcoming Wiggle CRC to our SSU family. The acquisition enhances our global online leadership, especially in the bike category. Our focus on growth and internationalization coupled with our platform approach drives significant scale benefits.”
The transaction is expected to close in the second half of 2021. The combined company is to be traded on the New York Stock Exchange under the name Signa Sports United. SSU’s other existing shareholders – holding company Signa, Japanese retailer AEON, insurance company R+V and Southeast-Asian retail group CentralGroup – have agreed to convert 100 percent of their ownership stakes into the new public company.
SSU had recently driven its global expansion through several acquisitions, including the tennis retailers Midwest Sports in March and Tennis Express in May (more in SGI Europe). After giving effect to the transaction and assuming no redemptions by Yucaipa’s shareholders, the company is expected to have approximately $350 million of liquidity to support future growth, including more strategic acquisitions and general corporate purposes.
Over the past three years, SSU has achieved organic growth of more than 25 percent annually. For the current fiscal year (ending Sept. 2021), the group expects net sales of $1.6 billion and adjusted EBITDA of more than $70 million.
More in SGI Europe.