Bain Capital has agreed to buy Varsity Brands, the owner of Indianapolis-based Herff Jones, in a deal estimated at $2.5 billion.
Bain, which will acquire the company from investors led by Charlesbank Capital Partners, plans to develop the company by supporting its e-commerce operations and through acquisitions, according to a statement Tuesday. While terms of the deal weren’t disclosed, CNBC reported earlier that the transaction values Varsity Brands at about $2.5 billion, citing sources it didn’t identify.
Dallas-based Varsity Brands, a maker of cheerleading uniforms and school spirit merchandise, merged with Herff Jones in 2011. Herff Jones, which was once one of Indianapolis' largest employers, markets class rings, yearbooks and graduation gowns and caps. The Herff Jones brand, along with Varsity Spirit and equipment and apparel distributor BSN Sports, were all combined under the Varsity Brands umbrella.
Herff Jones still maintains its headquarters at 4625 W. 62nd St. in Indianapolis.
BSN Sports also has sizable operations in Indianapolis. The company last year said it planned to spend $2.4 million to upgrade its sportswear production facility on the city’s northwest side, helping it retain 291 employees at the site and add 192 employees over the next six years.
Bain Capital is betting on the cheerleading's future as it inches toward inclusion in the Olympic Games.
The deal comes at a potentially critical moment for cheerleading, which had more than 4 million U.S. participants in 2016, according to the Sports & Fitness Industry Association—more than ice hockey, lacrosse or team swimming. Enthusiasts have for years lobbied to become part of the Olympics, and in late 2016 the sport was granted provisional status by the International Olympic Committee, the first step in a long process toward possible inclusion in future games.
Varsity’s sporting roots date back to 1974, when former University of Oklahoma cheerleader Jeff Webb founded the Universal Cheerleaders Association. In the 1980s, its three main business groups—selling uniforms, operating cheerleading camps, and hosting competitions—were combined to form Varsity Spirit.
Charlesbank and funds affiliated with Partners Group bought Varsity Brands in 2014 for about $1.5 billion. The following year it acquired Allgoods LLC, a specialty company that makes custom merchandise for school fundraising.
“This new partnership presents Varsity Brands with an exciting opportunity to continue to expand and improve our products and services,” said Adam Blumenfeld, chief executive officer of Varsity Brands in the statement.
Jefferies Group LLC, Goldman Sachs Group Inc. and Peter J Solomon Co. advised the Charlesbank-led group of investors on the deal.