SIGNA Sports United (“SSU” or the “Company”), the world’s leading sports e-commerce and technology platform, today announced additional PIPE investments and a new redemption backstop agreement related to its proposed business combination agreement with Yucaipa Acquisition Corporation (NYSE: YAC) (“Yucaipa” or “YAC”), a publicly-traded special purpose acquisition company. These additional elements increase deal certainty and ensure the listing of the enlarged pro forma company.
Mike Özkan, designated Chairman of the Board of SSU, said, “The upsizing of the PIPE demonstrates the increased interest in SSU’s sports e-commerce and technology platform. The backstop agreement underpins the principal’s commitment to the Company and provides transaction certainty for the strategic combination of the two largest online Bike retailers. The pro forma company will be in a strong position to pursue its mission to digitalize the global sports retail ecosystem with a guaranteed level of liquidity at all potential levels of redemptions by YAC shareholders.”
Ron Burkle, Chairman and President of Yucaipa, said, “This announcement allows SSU to focus on growing its leadership positions and accelerate its global expansion. We look forward to supporting the experienced SSU team on this exciting journey.”
The transaction is subject to approval by YAC’s shareholders and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2021.
SSU has entered into an additional $70 million of subscription agreements for the financing of its PIPE with Tier 1 institutional investors and sovereign wealth funds as well as ultra-high net worth individuals. Following this additional investment, total expected PIPE proceeds will increase from $302 million to $372 million.
The proceeds from the PIPE upsizing will be used to complete the acquisition of WiggleCRC as well as provide additional capital to fund strategic growth initiatives.
On October 15, 2021, SSU signed a Redemption Offset Agreement (“Agreement”) with Bridgepoint and SIGNA International Sports Holding GmbH, SSU’s controlling shareholder and member of the SIGNA group, providing for up to $178 million of additional liquidity, if necessary, in the event of elevated redemptions by YAC public shareholders. The backstop would be comprised in part by dollar-for-dollar increases in the PIPE (over and above the PIPE upsizing) for corresponding dollar increases in redemptions as well as, in remaining part by the exchange of cash consideration owed to the WiggleCRC Sellers into the equity of SIGNA Sports United B.V., a Dutch private limited liability company and wholly-owned subsidiary of SSU (“TopCo”). With the implementation of this backstop, the Agreement is expected to provide a minimum level of liquidity to the pro forma Company across all potential YAC public shareholder redemption levels.