SIGNA Sports United (“SSU” or the “Company”), has entered into a business combination agreement with Yucaipa Acquisition Corporation (NYSE: YAC) (“Yucaipa” or “YAC”), a publicly-traded special purpose acquisition company led by Chairman and President Ron Burkle and CFO and COO Ira Tochner. The combination also includes the acquisition of the WiggleCRC Group (“WiggleCRC”), one of the largest online bike retailers globally, currently owned by Bridgepoint.
The combined entity will become one of the largest pure-play sports e-commerce and technology platform company, with expected net revenues of approximately $1.6 billion in the financial year ending in September 2021, serving over 7 million active customers, 1,000+ brand partners, 500+ connected retail stores, and more than 15 million sports community users globally.
“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.”
As a global leader in four online e-commerce categories: Bike, Tennis, Outdoor and Team Sports, SSU has pursued a profitable growth strategy, investing to enter new markets and competing to establish leading positions. Over the twelve-month period ending March 31, 2021, the Company’s largest segment, Bike & Outdoor, achieved an Adjusted EBITDA margin of approximately 10% in its core DACH markets, whilst growing approximately 40% in revenue compared to the prior year period, and in the rest of Europe, growth exceeded 60% in revenue compared to the prior year period.
SSU Highlights
- A leading pure-play sports e-commerce and technology platform with compounding data advantage, playing in the fastest growing sports categories in an approximately $1.1 trillion global market which is large, fast-growing and fragmented, driven by megatrends in health & lifestyle, digitalization, e-mobility and the continued shift to online
- Multi-year track record of profitable organic growth of 25%+ annually, expected to generate approximately $1.6 billion of net revenues and more than $70m of Adjusted EBITDA in the financial year ending in September 31, 2021 (in each case, pro forma for the combination with WiggleCRC)
- Position in Europe bolstered by a growing presence in the U.S. from recent entry in Tennis (Midwest Sports acquisition and SSU’s pending Tennis Express acquisition) and Bike (WiggleCRC acquisition)
- Outstanding category-specific propositions, expertise and breadth of product assortment across iconic Bike, Outdoor, Tennis, and Team Sports webshop brands
- Scalable technology platform and fulfilment infrastructure enabling synergistic M&A and supporting platform solution offerings to sports ecosystem partners
- Multiple vectors to accelerate growth and value creation
Growth Strategy
SSU is well-positioned to drive strong growth through three strategic pillars:
- Organic growth – Leverage scale and superior capabilities to drive above-market organic growth in existing and adjacent markets
- Inorganic expansion – Optimize in-market, enter new geographies or categories and drive verticalization through M&A
- Platform solutions – Utilize technology platform and infrastructure to offer solutions to sports ecosystem partners
Transaction Overview
YAC has agreed to combine with SIGNA Sports United and the WiggleCRC Group based on a $3.2 billion pro forma enterprise valuation.
The transaction is expected to deliver up to approximately $645 million of gross proceeds through the contribution of up to $345 million of cash held in YAC’s trust account (assuming no redemptions) and a concurrent fully committed ordinary share PIPE of approximately $300 million (upsized from an envisaged PIPE of $250 million).
Ron Burkle is investing $50 million in the PIPE and is joined by top tier global institutional investors. The existing shareholders have agreed to convert 100 per cent of their ownership stakes into the new public company.
After giving effect to the transaction and assuming no redemptions by the YAC shareholders, the Company is expected to have approximately $350 million of liquidity to support future growth, including strategic acquisitions, and general corporate purposes.
The transaction has been unanimously approved by the Boards of Directors of each of YAC and SSU, and is subject to approval by YAC’s shareholders and other customary closing conditions. The transaction is expected to close in the second half of 2021.
Upon completion of the transaction, the combined company will trade on the NYSE under the SIGNA Sports United name.
Additional information about the proposed transaction, including a copy of the business combination agreement and an investor presentation, will be provided in a current report on Form 8-K to be filed by YAC with the United States Securities and Exchange Commission (the “SEC”) and available at www.sec.gov, on SSU’s website at https://signa-sportsunited.com/investor-relations and on YAC’s website at https://www.yucaipayac.com/investor-relations. SSU will file a registration statement (and YAC will file the proxy statement/prospectus forming part of the registration statement) with the SEC in connection with the transaction.
Advisors
Citi acted as lead financial advisor to SSU. Moelis & Company LLC acted as lead financial advisor to YAC. Jefferies acted as capital markets advisor to YAC.
Citi and Jefferies LLC acted as co-placement agents on the PIPE.
Skadden, Arps, Slate, Meagher & Flom LLP acted as lead legal advisor to SSU, and Kirkland & Ellis LLP acted as lead legal advisor to YAC.
Investor Call / Management Presentation
SSU and YAC will host a joint investor conference call to discuss the transaction and review the investor presentation today, Friday, June 11, 2021 at 10:00 am E.T.
Public Dial-in
US/Canada Toll-Free: 1-877-728-1750
International: 1-929-517-0865
Conference ID: 6391089
Phone replay available June 11, 2021 to June 18, 2021
US/Canada Toll-Free: 1-855-859-2056
International: 1-404-537-3406
Conference ID: 6391089
A webcast of the conference call and associated presentation materials will be accessible on SSU’s investor relations page at https://signa-sportsunited.com/investor-relations and on YAC’s website at https://www.yucaipayac.com/investor-relations. A replay will be available after the conference call and can be accessed on the investor relations page.
