Billionaire Burkle’s SPAC Buys European Sporting Goods Retailers

·2 min read

Grocery store billionaire and Pittsburgh Penguins co-owner Ronald Burkle is getting into the sporting goods business.

Burkle’s Yucaipa Acquisition, a SPAC that holds $345 million from an August IPO, has inked a deal to merge with Signa Sports United, a German-based online sporting goods retailer, according to a release from Signa. The deal, which values Signa at $3.2 billion, includes the concurrent purchase of WiggleCRC, an English sporting goods retailer that specializes in bicycles.

“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,” Stephan Zoll, CEO of Signa, said in the release.

In addition to using his SPAC funds in the deal, Burkle is anchoring the $300 million private investment in public equity (PIPE) financing that will bring additional cash to fund the deal. “Ron Burkle is personally investing $50 million into the PIPE, alongside some of the world’s best institutional public market shareholders, and the existing shareholders are rolling over 100% of their equity interests,” said Yucaipa SPAC chief operating office Ira Tochner, in prepared remarks for an investor call on the deal.

The combined companies generate 86% of their sales in Europe—and just 9% in the U.S.—with 63% of revenue coming from bicycles, 17% from tennis and the balance from team and outdoor sports, according to the presentation provided to investors.

Yucaipa is one of 164 SPACs involving sports figures or focused on sports businesses. The blank check sector has slowed dramatically in recent weeks due to regulator crackdowns and increasing investor hesitation to back deals.

Yucaipa SPAC’s shares were up about 8 cents Friday morning on news of the deal, to $9.92 a share. Signa will take over Yucaipa’s New York Stock Exchange listing on completion of the deal in the second half of the year.

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