Private equity firm KKR & Co has agreed to purchase Varsity Brands, from Bain Capital for approximately $4.75 billion, sources revealed on Wednesday. The deal, which includes debt, represents a significant shift in ownership for the well-known cheerleading company.
Varsity Brands will be integrated into KKR’s Americas private equity fund. KKR plans to extend equity ownership to all employees of Varsity Brands, a benefit traditionally reserved for senior executives in the corporate realm.
Read More: What KKR’s Acquisition of Varsity Brands Means for the Future of the Company and Its Employees
Reuters first reported the news of the pending sale on Wednesday. Bain Capital, KKR, and Varsity Brands declined to comment on the deal.
Bain Capital acquired Varsity Brands in 2018 for about $2.5 billion from Charlesbank Capital Partners and Partners Group. Last year, Reuters reported that Bain was considering a sale or an initial public offering of the company.
Founded in 1974 by Jeff Webb, Varsity Brands has become a significant player in the cheerleading and school spirit industries. Varsity Spirit, the heart of the company, provides uniforms and hosts events that bring cheerleaders together from across the nation.
Varsity Spirit is known for its cheerleading uniforms and apparel, as well as organizing educational camps, clinics, and competitions. Additionally, Varsity Brands includes BSN SPORTS, a major supplier of customizable team sports equipment and apparel, partnering with brands like Nike and Under Armour.
Varsity Brands also produces school yearbooks, a business retained when Herff Jones was sold to Atlas Holdings last year.
Buyout firms are increasingly interested in sports apparel businesses due to their reliable cash flows. For instance, ACON Investments is preparing to take New Era Cap public, and earlier this year, Platinum Equity acquired Augusta Sportswear and Founder Sport Group.
This acquisition marks a significant transaction in the sports apparel industry. The future direction of Varsity Brands under KKR’s ownership is anticipated by many in the industry.
Varsity’s influence extends beyond business; it’s a cornerstone of cheer culture. The company is known for events like the National High School Cheerleading Championship and the Universal Cheerleaders Association (UCA) camps, promoting cheerleading as a sport.
With KKR’s acquisition, there is anticipation about the future direction of Varsity Brands. The expanded employee equity plan could impact company culture and performance.
As KKR takes the reins at Varsity Brands, the industry’s focus will be on how this acquisition will shape the future of the company and its broader impact on the cheerleading market.
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