American Capital Strategies Ltd. announced that it has invested $23 million in Riddell Sports Group Inc. American Capital’s investment takes the form of senior subordinated debt and equity and supports the acquisition of Riddell by Fenway Partners Inc. from Lincolnshire Management Inc. Wachovia Bank led a revolving credit facility and senior term loan.
“American Capital’s investment in Riddell, the manufacturer of the official NFL helmet, is an excellent addition to our diversified and growing portfolio of 77 companies,” said American Capital COO Ira Wagner. “With this investment, we had the opportunity to work for the first time with Fenway Partners, an outstanding firm, providing the necessary financing to complete this buyout. We are confident in the experienced and well-rounded management team prepared to lead Riddell as it faces new opportunities in the growing sporting goods industry.”
“American Capital’s investment in Riddell is an exciting opportunity. We are supporting a company with one of the strongest brand names in the sports equipment industry,” said American Capital Principal Brian Graff. “Riddell is a well-established company and has capitalized on its extensive brand exposure, great customer relationships, national direct sales force and history of successful product innovations. In particular, Riddell leads the football helmet manufacturing and football equipment reconditioning markets. Its position as the official helmet of the NFL is testimony to the company’s quality product.”
Founded in 1922, Chicago, IL based Riddell is a leading designer, manufacturer and licensor of branded sporting goods. Riddell was the first to develop safety items such as the plastic helmet, chinstrap, carbon steel facemask, air impact system for shoulder pads and most recently, the Revolution helmet. Other products include uniforms, shoulder pads and sports memorabilia. Riddell expects annual sales in excess of $100 million and has experienced sustained revenue growth over the last several years. Customers include all of the NFL teams and Division I colleges as well as many high school and youth leagues.
“We are delighted to partner with American Capital, establishing a new relationship with a respected financial partner in the middle market,” said Fenway Partners Chairman and Chief Executive Officer Peter Lamm. “Together with American Capital and Riddell management, we look forward to achieving future growth through increased market penetration, developing new sports categories and selected acquisitions.”
As of June 30, 2003, American Capital shareholders have enjoyed a total return of 177% since the Company’s IPO — an annualized return of 19%, assuming reinvestment of dividends. American Capital has paid a total of $11.68 per share in dividends since its August 1997 IPO at $15 per share.
