KKR’s Academy Sports Confidentially Files For IPO

19 Aug 2020, 02:54 AM IST

(Bloomberg) -- KKR & Co.’s sporting goods retailer Academy Sports + Outdoors has confidentially filed paperwork for an initial public offering that could happen as soon as this year, according to people with knowledge of the matter.

The company is working with Credit Suisse Group AG and KKR Capital Markets on the potential public listing, said the people, who asked not to be identified because the talks are private. Other banks may soon be added to the lineup, one of the people said. As with any company that explores an IPO, it may also field takeover interest.

Academy’s earnings before interest, taxes, depreciation and amortization for the 12 months ended May 2 were $361 million, according to a person with knowledge of the matter. At a similar multiple to publicly traded rival Dick’s Sporting Goods Inc., the company could be valued $2.5 billion or more.

Representatives for KKR and Credit Suisse declined to comment. Academy Sports didn’t immediately respond to a request for comment.

Since 2017, the Securities and Exchange Commission has allowed all companies to file early IPO paperwork without having to make the details public.

KKR has owned Katy, Texas-based Academy Sports since 2011, growing revenue to more than $4.9 billion from $2.7 billion in 2010, according to the company’s website and a statement announcing the deal.

Academy Sports traces its roots to a single tire shop, which opened in San Antonio in 1938. Under KKR’s ownership the store footprint has grown to more than 250 stores in 16 states across the South and Midwest of the U.S., up from 133 stores.

In June, Moody’s Investors Service upgraded Academy’s rating, which remains in junk territory. The agency changed its outlook for the retailer to “stable” from “negative” and said it believes “solid operating performance trends are likely to continue over the near term, which will significantly reduce risks associated with the company’s ability to refinance its $1.4 billion term loan due July 2022 in a timely and economical manner.”

Academy Sports’s term loan -- with about $1.5 billion outstanding due in 2022 -- last traded around 91 cents on the dollar, rebounding off a low of about 55 cents on the dollar in March.