KKR Completes Acquisition of Varsity Brands from Bain Capital and Charlesbank

Rhea-AI Summary

KKR, a leading global investment firm, has completed the acquisition of Varsity Brands from Bain Capital and Charlesbank. Varsity Brands, a leader in team sports, athletics, and spirit, serves over 8 million athletes and students annually, offering customized solutions to more than 150,000 customers. The company has strong relationships with iconic athletic brands and is a leading organizer of cheerleading competitions.

KKR aims to support Varsity Brands' growth strategy and mission to serve sports teams, schools, and student-athletes. The acquisition includes plans to implement a broad-based equity ownership program for all employees. Varsity Brands recently launched SURGE, an initiative to empower girls in sports, and offers the IMPACT School Partnership Program to enhance school pride and student engagement.

Positive

• KKR's investment supports Varsity Brands' growth strategy and mission
• Varsity Brands serves over 8 million athletes and students annually
• The company has strong relationships with iconic global athletic brands
• Implementation of a broad-based equity ownership program for all employees
• Launch of SURGE initiative to empower girls in sports

Negative

• None.

Financial Analyst

The acquisition of Varsity Brands by KKR from Bain Capital and Charlesbank marks a significant shift in ownership for this leader in team sports, athletics and spirit. While financial terms weren't disclosed, this deal likely involves a substantial transaction value given Varsity Brands' extensive reach, serving over 8 million athletes and 150,000 customers annually. KKR's investment strategy, including the implementation of an employee equity ownership program, could potentially boost company performance and valuation. The backing of a major private equity firm like KKR suggests strong growth potential in the sports and education sectors. Investors should monitor how this change in ownership impacts Varsity Brands' market position and financial performance in the coming quarters.

Market Research Analyst

This acquisition positions Varsity Brands to capitalize on the growing youth sports market, estimated to be worth over $19 billion annually in the U.S. The company's diverse portfolio, including uniforms, equipment and event organization, provides multiple revenue streams. The SURGE initiative addressing female athlete retention is particularly noteworthy, as it taps into a important market segment with significant growth potential. With KKR's support, Varsity Brands could expand its market share through strategic acquisitions or by entering new product categories. The company's established relationships with major athletic brands like Nike and Adidas also provide a competitive edge in this lucrative market.

Corporate Strategy Expert

KKR's acquisition of Varsity Brands presents a strategic opportunity for expansion in the sports and education sectors. The private equity firm's track record of implementing broad-based equity ownership programs could significantly enhance employee engagement and productivity at Varsity Brands. This approach has proven successful across 50+ KKR portfolio companies, potentially leading to improved operational efficiency and innovation. The focus on growing into new markets and categories suggests a diversification strategy that could mitigate risks associated with any single segment of the sports and education market. Investors should watch for potential synergies with other KKR portfolio companies and how this might accelerate Varsity Brands' growth trajectory.

New investment supports Varsity Brands’ growth strategy and mission to serve sports teams, schools, and student-athletes

DALLAS & NEW YORK--(BUSINESS WIRE)-- Varsity Brands (the “Company”), a leader in team sports, athletics and spirit, and KKR, a leading global investment firm, today announced the completion of the acquisition of Varsity Brands by KKR from Bain Capital and Charlesbank. As the new majority owner of Varsity Brands, KKR will support the Company as it continues to grow its business.

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. 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. 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,” said Adam Blumenfeld, CEO of Varsity Brands. “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.”

With a history spanning five decades, Varsity Brands serves as a catalyst for positive change, supporting the physical, mental and emotional well-being of students and athletes through innovative resources and programs that help kids feel connected, supported and inspired to excel. Most recently, the Company debuted a new initiative, SURGE, which stands for Strength, Unity, Resilience, Growth and Equity, aiming to empower girls to stay in sports. SURGE encourages female athletes to lead healthy, successful lives through a variety of free online tools for coaches to build self-esteem, instill confidence and prioritize mental health. Additionally, the Varsity Brands IMPACT School Partnership Program offers schools tailored solutions to enhance school pride, boost student engagement, and foster community spirit.

“Varsity Brands is a leading solutions-oriented services provider with a mission to elevate the student experience through sport and spirit, helping schools and teams foster greater participation, enthusiasm and community,” said Felix Gernburd, Partner at KKR.

“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.

KKR will support Varsity Brands in creating a broad-based equity ownership program to provide all the Company’s employees with the opportunity to participate in the benefits of ownership. This strategy is based on the belief that team member engagement through ownership is a key driver in building stronger companies. Since 2011, more than 50 KKR portfolio companies have awarded billions of dollars of total equity value to over 100,000 non-senior management employees.

KKR is making this investment primarily through its North America Fund XIII. Terms of the transaction were not disclosed.

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

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

About Varsity Brands

Varsity Brands is a premier team sports platform, providing a comprehensive range of services and solutions for sports, cheer, dance, band, and yearbook programs. Varsity Brands supports athletic programs, schools, gyms and teams with customizable uniforms, gear, competitions, experiences, training, education and more. Our mission is to elevate the experience of more than 55 million students nationwide through sport and spirit. Discover how Varsity Brands champions youth participation, well-being and engagement at varsitybrands.com.

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240826120044/en/

Varsity Brands

Sue Crumpton

media.relations@varsitybrands.com

Samantha Gaspar

samantha.gaspar@teneo.com

KKR

Miles Radcliffe-Trenner / Liidia Liuksila / Emily Cummings

212-750-8300

media@kkr.com

Source: KKR

FAQ

What is the significance of KKR's acquisition of Varsity Brands?

KKR's acquisition of Varsity Brands is significant as it supports the company's growth strategy and mission to serve sports teams, schools, and student-athletes. KKR will provide resources and expertise to help Varsity Brands expand its business and enhance its offerings in the sports and education sectors.

How many customers does Varsity Brands serve?

Varsity Brands serves more than 150,000 customers, including colleges, universities, schools, club teams, and recreational programs. The company reaches over 8 million athletes and students annually with its products and services.

What is the SURGE initiative launched by Varsity Brands?

SURGE (Strength, Unity, Resilience, Growth, and Equity) is an initiative launched by Varsity Brands to empower girls to stay in sports. It provides free online tools for coaches to build self-esteem, instill confidence, and prioritize mental health among female athletes.

How will KKR's acquisition affect Varsity Brands employees?

KKR plans to implement a broad-based equity ownership program for all Varsity Brands employees. This program will provide employees with the opportunity to participate in the benefits of ownership, based on the belief that team member engagement through ownership is a key driver in building stronger companies.