WiggleCRC will be acquired as part of a plotted IPO for European sports giant Signa Sports United, a deal propped up by a tie up with the Yucaipa Acquisition Corporation (YAC: NYSE).
The deal creates a platform that competes among the world’s largest pure-play sports e-commerce and technology platforms around, pulling an audience of over 7 million active customers, north of 1,000 brand partners and a network of over 500 stores across Europe giving a physical presence. It is now expected that the IPO on the New York Stock Exchange will shortly follow under the Signa Sports United name (ticker likely to be SSU).
First rumoured to be on the cards in April, the confirmation this morning places the implied enterprise value of the overall group at €3.2 billion.
At the present time the value of the takeover of Wiggle from current owners Bridgepoint has not been disclosed, but the current majority owner will receive part of the purchase consideration in shares of the new public company keeping them invested. Wiggle began as a small independent store, surfing the online retail wave until it acquired rival Chain Reaction Cycles in 2016. Today it employs around 10,000 staff.
The Yucaipa Acquisition Corporation has been set up as a ‘blank cheque’ special purpose acquisition vehicle to see the deal over the line ahead of the public listing of the group. The transaction encompasses up to approximately $645 million of gross proceeds through a cash contribution of approximately $345 million held in Yucaipa’s trust account.
Once combined, the company is a profitable business with expected net revenues of approximately $1.6 billion in the financial year ending in September 2021 (pro forma for the combination with WiggleCRC).
“We’re proud and excited by this next chapter in SSU’s growth story. Becoming a listed company allows us to continue capturing market share in Europe and to accelerate our U.S. and international expansion while scaling our platform solutions,” said Stephan Zoll, CEO of SSU. “We also look forward to welcoming WiggleCRC to our SSU family. The acquisition enhances our global online leadership especially in the bike category. Our focus on growth and internationalization coupled with our platform approach drives significant scale benefits.”
“SSU is a global leader in the fastest-growing sports categories and is well-positioned for continued success as a public company,” said Ron Burkle, Chairman and President of Yucaipa. “With its technology platform – and a combination of scale, international growth and profitability – we expect SSU to grow its leadership positions and accelerate its global expansion. We look forward to becoming shareholders and partnering closely with the talented SSU team on this exciting journey.”
The transaction is expected to land the group with $350 million of liquidity to sustain future growth and that could well include further acquisitions, though not necessarily more in the cycling world.
The transaction has been unanimously approved by the Boards of Directors of both the YAC and SSU, and is subject to approval by YAC’s shareholders, among other customary conditions. The transaction is expected to close in the second half of 2021.