Varsity Brands, the parent of BSN Sports, Varsity Spirit and Herff Jones, agreed to be acquired by the private-equity powerhouse Bain Capital Private Equity in a move expected to pave the way for the company’s next level of growth.
The seller was Charlesbank Capital Partners, which acquired Varsity Brands in late 2014. In a statement, Bain said the company plans to develop the company by supporting the company’s e-commerce operations and through acquisitions.
“Bain, in our view, is one of the most prestigious and well known investment firms in the world,” Adam Blumenfeld, CEO of Varsity Brands, told SGB. “Their desire to invest alongside management, and build upon the incredible work that Charlesbank started, and in many cases completed, with management, is continued affirmation and faith in our vision.”
“Bain has $95 billion in cash under management,” added Blumenfeld. “I expect them to contribute meaningfully to our buildout in digital innovation, e-commerce, supply chain and strategic investments.”
Varsity Brands is the successor company of Herff Jones, the leading supplier of class rings, yearbooks, caps and gowns and graduation diplomas that was founded in
Herff Jones also makes a number of sports’ most-prestigious awards, including the Naismith award given to the year’s top U.S. college basketball players, the Heisman Trophy for the top college football player, NBA All Star rings, the championship rings for all five of the San Antonio Spurs’ NBA Championships and the Super Bowl XLI championship rings for the Indianapolis Colts.
In 2011, Herff Jones branched out by acquiring Varsity Brands, the parent of Varsity Spirit and the leader in the cheerleading space. Beyond manufacturing uniforms, Varsity Spirit operates a wide range of training camps, uniforms and national competitions on ESPN. In 2013, Herff Jones acquired BSN Sports, the nation’s largest provider of team uniforms and sporting goods to schools, leagues and municipalities, for $460 million. By early 2014, Herff Jones re-branded the overall company to Varsity Brands.
Blumenfeld, who had guided BSN Sports for the past two decades as the company successfully consolidated the team dealer channel, became CEO of Varsity Brands in April 2017. He will continue to lead the business.
Varsity Brands and Bain didn’t reveal terms of the deal, but CNBC reported that Bain agreed to a purchase price of $2.5 billion. That’s well above the roughly $1.5 billion Charlesbank Capital paid for Varsity Brands in December 2014. Blumenfeld told SGB, “The business is doing very well.”
Since Charlesbank’s acquisition, Varsity Brands was thrust into the national spotlight when the company went to the Supreme Court to successfully defend the copyright of Varsity Spirit’s iconic cheerleading uniforms, known for their chevrons and stripes.
BSN Sports accelerated the company’s efforts snapping up local team dealers across the country and the company now has more than 800 sales professionals nationwide. Over the past year, BSN has added over 200 sales professionals in key markets such as Alabama, Georgia, Washington, Utah, Kentucky, Ohio, Maryland, Virginia, Oregon, Idaho and California. So far this year, BSN has acquired Kelly’s Sports, Ltd in West Chester, PA; Reynolds Team Sales in Western Massachusetts; Midwest Sportswear & Athletic Supply in Minnesota; DC Sports in New York/New Jersey and Gulf Coast Athletic Supply in Texas.
Bain is especially expected to support Varsity Brands’ online and digital initiatives. On Wednesday, BSN Sports and Stack Sports, formerly Blue Star Sports, announced a partnership to develop a digital platform that offers team sales integration across all facets of youth sports, from ordering customized team apparel and athletic equipment to on-field participation.
“For over 50 years, Varsity Brands has served as an essential force for good as part of the academic and athletic student experience,” said Ryan Cotton, a managing director at Bain Capital Private Equity, in a statement. “We are excited to partner with the company’s experienced, committed management team to amplify the company’s e-commerce operations and digital expansion, while accelerating its growth through complementary acquisitions and organic initiatives to become the go-to source for every school’s sport, spirit and achievement needs.”
The deal marks for Bain the latest of the company’s investments in the consumer and retail space, including Canada Goose, Toms Shoes and Blue Nile.
Blumenfeld expects Bain’s participation will be “very meaningful” to Varsity Brands.
“Bain’s reputation for successful investing and partnership with its family of companies speaks for itself,” said Blumenfeld. “To our employees, it speaks to credibility, trust and faith in our mission. To prospective partners of all types, it speaks to the confidence they can have in our long term commitment to the space and the phenomenal resources we have at the ready to bring it all to fruition. It’s a big day for the company and the employees of Varsity Brands.”
Blumenfeld said all three of the company’s businesses–BNS Sports, Varsity Spirit and Herff Jones–are “doing very well,” with each packing several initiatives to drive growth.
“As you can imagine, not only are we busy on multiple fronts advancing the ball for sport, spirit and achievement, but we are working holistically to elevate the experience for all students, athletes and administrators on campus through our IMPACT program, St. Jude philanthropic commitment and Varsity Brands School Spirit Awards,” stated Blumenfeld. “We take community involvement and support seriously, and you will see key initiatives (sooner than later) that underscore how we prioritize this initiative.”
Blumenfeld also said the Bain position puts Varsity Brands in a favorable position to continue to pursue tuck-in acquisitions in the team dealer space, as well as larger ones to drive growth.
Said Blumenfeld, “We have a big appetite for accretive partners of all shape and sizes. We intend to continue to create a multi-billion dollar platform to best care for our customers and serve the scholastic and after-school markets–and their communities.”
Photo courtesy Varsity Brands