(Bloomberg) -- Bain Capital is telling investors that Varsity Brands, the cheerleading outfitter it agreed to buy last week, could be a good candidate for the public markets.
The Boston-based private equity firm is acquiring Varsity for $2.9 billion, including debt, according to an email to investors seen by Bloomberg. The message, signed by the managing directors of Bain Capital Private Equity, said the company’s market-leading positions, resilience against internet rivals and consistent growth make it “an attractive IPO candidate.”
Bain’s 12th main buyout fund, which collected $9.4 billion last September, will invest about $760 million in the deal, which is expected to close in late July, according to the email.
A representative for Bain declined to comment.
Here’s what else got Bain excited about Varsity Brands, according to the email:
- Strong fundamentals: “the company has displayed stable, predictable performance across a diverse mix of businesses and customers,” the directors wrote. Its leadership in niche industries with “above average cycle defensibility and strong underlying growth tailwinds” also excited the team. Buyout managers are increasingly looking to businesses that can withstand a downturn as markets continue their second-longest bull run in history.
- Driving changes: planned growth initiatives include increasing the digital presence of Varsity’s team-shop business, building teams to cross-sell Varsity’s products to existing customers and improving the effectiveness of it sales force.
Bain has followed Varsity since it was last up for sale 2014, the managing directors wrote. This time round, the firm pre-empted the process with an offer “in the early stages.”
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