Bain Capital to Buy Varsity Brands

Bain Capital Private Equity has agreed to acquire Varsity Brands from Charlesbank Capital Partners and Partners Group which together acquired the company in November 2014.

Varsity Brands operates through three businesses: BSN Sports, a distributor of sports equipment and apparel; Varsity Spirit, a provider of cheerleading uniforms and educational camps, clinics and competitions; and Herff Jones, a provider of graduation and educational products and services.

Varsity Brands markets and sells its products through catalogs, telesales, e-commerce sites, and direct sales channels to elementary and middle schools, high schools and colleges/universities, as well as professional and collegiate sports teams and corporations. The company, led by CEO Adam Blumenfeld, was founded in 1974 and has more than 9,000 employees. Varsity Brands is headquartered in Memphis (www.varsitybrands.com).

Terms of the transaction were not disclosed. However, CNBC has reported that the enterprise valuation for the transaction is $2.5 billion. Varsity had revenues of $1.7 billion last year and $1.55 billion in 2016.

“For over 40 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. “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.”

Bain Capital Private Equity was founded in 1984 and invests in the consumer and retail; financial and business services; healthcare; industrials; and technology, media and telecommunications sectors. The firm has a team of approximately 220 investment professionals with offices in Boston, Chicago, New York, Palo Alto, San Francisco, Dublin, London, Munich, Melbourne, Mumbai, Hong Kong, Shanghai, Sydney and Tokyo (www.baincapitalprivateequity.com).

“We were fortunate to partner with Adam Blumenfeld and his outstanding management team and enjoyed working with them to execute on their growth strategy,” said Andrew Janower, a Managing Director at Charlesbank Capital Partners. “Together, we closed multiple strategic acquisitions, grew the sales force, achieved significant cost-savings and enhanced the customer experience. We are proud of what Varsity Brands has achieved and are confident that its success will continue as it pursues its next growth phase.”

“We are grateful to Charlesbank and Partners Group for their support and guidance,” added Mr. Blumenfeld. “They have played an integral role in helping Varsity Brands execute our growth strategy while serving as excellent partners in pursuit of our unique and powerful mission.”

Charlesbank invests from $50 million to $250 million in management-led buyouts and growth capital financings in companies with enterprise values of $150 million to $1.5 billion. Sectors of interest include consumer, industrial, industrial services and distribution, TMT and business services. In October 2017, the firm held a final closing of Charlesbank Equity Fund IX at its hard cap of $2.75 billion. The firm has offices in Boston and New York (www.charlesbank.com).

Partners Group is a global investment management firm with over $74 billion of assets under management in private equity, private real estate, private infrastructure and private debt. The firm is headquartered in Zug, Switzerland, and has over 950 employees across 19 offices around the globe (www.partnersgroup.com).

Jefferies is the lead financial advisor to Charlesbank and Partners Group, and Goldman Sachs and Peter J Solomon are serving as co-advisors.

Goodwin Procter advised Varsity Brands on this transaction. The Goodwin legal team was led by partners Joseph Bernardi and Jim Curley and included partners Jennifer Bralower, Milena Tantcheva and William Whitledge and associates Anne Cataldo, Richard Evans, Laura Jacobs and Argyrios Saccopoulos.

Kirkland & Ellis is serving as legal counsel to Bain Capital Private Equity.

The sale of Varsity Brands to Bain Capital is expected to close during the third quarter of 2018.

© 2018 Private Equity Professional | June 20, 2018

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