Varsity Brands and global investment firm KKR have completed the acquisition of Varsity Brands by KKR from Bain Capital and Charlesbank.

As Varsity Brands’ new majority owner, KKR reported it will support the company as it continues to grow its business. KKR said it has made this investment primarily through its North America Fund XIII.

Varsity Brands is comprised of BSN Sports, the largest team dealer and online team sports outfitter in the U.S., and Varsity Spirit, which focuses on the cheerleading and team sports market.

According to early reporting for Reuters, the deal is said to be worth $4.75 billion, including debt.

Bain reportedly acquired Varsity Brands in 2018 from private equity firms Charlesbank Capital Partners and Partners Group for around $2.5 billion. In November 2023, SGB Media reported that Bain was exploring a sale or initial public offering (IPO) that would have valued the company at over $6 billion, including debt.

Sources that spoke with Reuters last year said that Varsity Brands generates over $400 million in 12-month EBITDA (earnings before interest, taxes, depreciation, and amortization).

KKR has been busy in the sporting goods space, most recently with its acquisition of Academy Sports + Outdoors and its subsequent divestiture of its shares after the Academy IPO. The new owner said in a media release that the “Varsity Brands platform offers an extensive range of high-quality, customized solutions, services, and experiences that support school and team sports, athletics and spirit programs, reaching over eight million athletes and students annually.”

“The company is a national marketer, manufacturer and distributor of customized team uniform and apparel solutions and team-specific sporting goods and equipment serving more than 150,000 customers, including colleges, universities, schools, club teams and recreational programs. Additionally, the company has strong, long-standing relationships with iconic global athletic brands such as Nike, adidas, Under Armor, New Balance and Lululemon,” KKR said.

Varsity Brands is also a leading organizer of cheerleading competitions and training camp programs.

“Today is a pivotal moment for Varsity Brands as we welcome KKR as our new investor,” said Adam Blumenfeld, CEO of Varsity Brands. “We see immense growth potential as we advance our mission to support teams, schools and communities, elevating the experience for young people nationwide. This is a proud day for the Varsity Brands team, whose commitment and performance are critical to our continued success. I am also excited for our colleagues to join KKR and our leadership team as co-owners of the company

“We are grateful for the support and partnership from Bain Capital and Charlesbank. Their support has been instrumental in laying the foundation for our continued success. I want to express my sincere gratitude for their belief in our mission and role in shaping the Varsity Brands we know today,” continued Blumenfeld.

KKR will reportedly support Varsity Brands in creating a broad-based equity ownership program to allow all the company’s employees to participate in the benefits of ownership. KKR said this strategy is based on the belief that employee engagement through ownership is a key driver in building stronger companies. Since 2011, over 50 KKR portfolio companies have awarded “billions of dollars of total equity value to over 100,000 non-senior management employees.”

“We look forward to working alongside Adam and his passionate team to support their strategy for growing Varsity Brands’ platform in new markets and categories while continuing to deliver exceptional products, services and contributions to the sports and education ecosystems,” said Angad Singh, director at KKR.

Goldman Sachs and Jefferies served as KKR’s financial advisors and Simpson Thacher & Bartlett LLP served as its legal advisor.

BofA Securities and William Blair served as joint financial advisors to Varsity Brands, and Kirkland & Ellis LLP served as its legal advisor.

Image courtesy BSN Sports