German online retailer Signa Sports United GmbH is in talks to go public through a merger with billionaire investor Ron Burkle’s special purpose acquisition company, people with knowledge of the matter said.
Berlin-based Signa Sports has been discussing a deal with the blank-check firm, Yucaipa Acquisition Corp., that could value the combined entity at more than $4 billion, the people said, asking not to be identified because the information is private. Signa Sports is considering an acquisition of U.K. rival Wiggle Ltd. as part of the transaction, the people said.
Yucaipa Acquisition, which counts Burkle as its chief executive officer, raised $345 million in its U.S. initial public offering in August, according to data compiled by Bloomberg. No final agreements have been reached, and Signa Sports could opt to pursue talks with a different SPAC if negotiations fall apart, the people said.
The German company previously considered an initial public offering in 2018, people with knowledge of the matter said at the time. A representative for Yucaipa declined to comment, while spokespeople for Signa Sports and its parent company didn’t immediately respond to queries.
Representatives for Wiggle and its private equity owner, Bridgepoint, declined to comment. Reuters reported earlier Thursday that Signa Sports was speaking to SPACs including Yucaipa Acquisition, citing unidentified people.
Signa Sports, backed by Austrian property tycoon Rene Benko, sells sporting goods for cycling, tennis, hiking, and team sports enthusiasts. It runs e-commerce sites under brands including Fahrrad.de, Bikester, Campz, Addnature, Tennis-Point, Outfitter and Stylefile.
The firm has around four million active customers and over 200 million visitors each year, according to its parent company’s website. Japanese retailer Aeon Co. agreed to buy a stake in Signa Sports in late 2018.
In February, Signa Sports announced a deal to enter the U.S. market with the acquisition of Midwest Sports, an Ohio-based online retailer of tennis goods. At the time, Signa Sports said it was profitable and had increased revenue at a compound annual growth rate of about 30% over the previous three years.
The company operates in 17 countries and recorded more than $1 billion of gross merchandise volume in the 2020 financial year, according to the statement.
Burkle, who is a co-owner of the National Hockey League’s Pittsburgh Penguins, founded his investment firm Yucaipa Cos. in 1986. He’s completed more than $40 billion of acquisitions in industries including retail, logistics, hospitality and entertainment, according to the prospectus for his SPAC’s initial public offering.
The billionaire has previously been involved in takeovers of U.S. grocers like A&P and Fresh & Easy Neighborhood Market Inc. Private members club Soho House is also among his firm’s investments.
