In an exclusive interview with Sports Executive Weekly, Under Armour founder and CEO Kevin Plank announced that Under Armour has sold a 9% stake in the performance apparel brand to Rosewood Capital, a San Francisco-based private equity firm. Plank did not detail the amount of the investment, but market sources indicated that Rosewood invested $25 million for the stake.
Until now, Under Armour has supported their meteoric growth through debt financing, holding on to 100% of equity in the company. As we reported in SEW_0403, UA is projecting $200 million in sales for 2004 after hitting $110 in 2003 and roughly $55 million in 2002.
Founded in 1985, Rosewood Capital is a private equity firm that invests in growth companies in the consumer sector. Their website states, “We are actively looking to partner with proven management teams and investing companies with compelling economic models and strong market leadership.”
Other Rosewood investments include Jamba Juice and Town Sports (New York Sports Clubs). Chip Adams, Rosewood Managing Director, will serve on Under Armours board.
Asked what Rosewood found compelling about Under Armour, Adams told SEW, “It was all about the management team, starting with Kevin Plank. He is one of the most extraordinary people in the business today. Kevin has a unique combination of drive, leadership, vision and values.”
Asked where Rosewood could help Under Armour, Adams stated, “The best way to help Kevin is to stay out of his way, but to respond when he needs help. Rosewood will provide access to people, through our network, to corporate partners and to capital.”
Plank said, “There is no better time to raise money than when you dont need it.” He noted that Rosewood “strengthens the management of the company. They are amazing partners.” Lead investors in Rosewood are Don Fisher, founder of the Gap and Bob Fisher, current Gap chairman.
Plank continued, “As we continue to grow, our balance sheet becomes more important. This investment strengthens the balance sheet.”
“Rosewood will not be involved on a day-to-day basis”, said Plank. “They bring us tremendous expertise at the board level, giving us a more strategic outlook.”
Plank was more popular with the analysts at the most recent Super Show Financial Day than any of the public companies. Falling all over themselves to get close…
>>> Positioning for an IPO is always rumored after growth and a play like this, but UA and Rosewood are show no desire to flip this thing anytime soon…