WiggleCRC deal completes as new owner debuts on New York Stock Exchange - road.cc
WiggleCRC has formally come under new ownership as Signa Sports United (SSU), the Berlin-based online retailer which announced in June that it was buying the UK business, made its New York Stock Exchange debut on Wednesday.
The acquisition of WiggleCRC was tied to SSU’s IPO, which was achieved through the group’s merger, also announced in June, of publicly quoted special purpose acquisition company, Yucaipa Acquisition Corporation.
SSU, owned prior to its stockmarket listing by Austrian property billionaire Rene Benko, is run by a former managing director of eBay in Germany, already owned cycling e-commerce brands including Fahrrad.de, Bikester and Probikeshop, plus other brands specialising in outdoor gear, tennis and team sports.
In June, it said that the combined group following the purchase of WiggleCRC – whose previous owners, the private equity firm Bridgestone, has taken a stake in the enlarged business – would have turnover of $1.6 billion, and adjusted earnings before interest, tax, depreciation and amortisation of $70 million.
Commenting on its NYSE listing, CEO Stephan Zoll said (link is external) : “This transaction is a milestone event for Signa Sports United, providing capital to bolster our position in the rapidly growing sports e-commerce technology space and continue our expansion in Europe as well as into the United States.
“SSU is committed to a strategy of long-term value creation, and we are pleased to begin our journey as a public company to unlock the full potential of our platform and infrastructure.”
He added, “The acquisition of WiggleCRC is a huge strategic achievement for us, strongly complementing our geographic footprint and providing various synergies in the bike category. We are delighted to welcome the Wiggle Chain Reaction Cycles team to our group and are looking forward to mutually expand our position as the leading global bike online platform.”
Mike Özkan, designated Chairman of the Board of SSU, said, “Today, Signa Sports United emerges as a global leader in sports e-commerce technology poised to accelerate its expansion.
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“With the closing of the business combination as well as the WiggleCRC acquisition, SSU is taking its next step to further accelerate its global expansion as a NYSE listed company. The listing will allow the company to accelerate the strategic consolidation of the sports e-commerce technology sector.”
The company said that in June that the deal that has now completed would see it become “the world’s largest pure-play sports e-commerce and technology platform company, serving over 7 million active retail customers, 1,000+ brand partners, 500+ connected retail stores, and more than 15 million sports community users globally.”
Zoll said: “We're proud and excited by this next chapter in SSU’s growth story. 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.
“We also look forward to welcoming WiggleCRC to our SSU family. The acquisition enhances our global online leadership especially in the bike category.
“Our focus on growth and internationalisation coupled with our platform approach drives significant scale benefits,” he added.
Earlier this year, the company acquired two US-based e-commerce sites MidwestSports.com and TennisExpress.com, and is targeting strong growth in the country.
“Geographically, we have our stronghold in Europe, where we are the clear market leader,” Zoll explained in a presentation – a copy of which has been published online by US outlet Bicycle Retailer and Industry News (link is external) – to potential investors in June.
“We see continued growth in Europe, but also a major opportunity to replicate this success in the US, which, despite its massive market size, is less mature from an online market development standpoint, with no scaled operators.
“With our recent tennis acquisition of Midwest Sports and Tennis Express and the Wiggle CSC acquisition, we will generate approximately 9 per cent of total net revenues in the US and are well positioned to further grow this share.”
He highlighted what he sees as huge opportunities in the online sports retail market in part due to “global megatrends.”
He said: “People first of all want to stay healthier for longer, and sports is the perfect means to do that.
“Second, they also use more and more digital devices when doing sports – tracker, wearables, apps to support them in their sports activities.
“And third, an increasing customer base is purchasing their sports gear online, so there's a massive shift from offline to online channels.
“All of that drives up the US$72 billion online sports retail market today to be an expected US$130 billion in 2025. And if you add the offline piece, we anticipate our total addressable market will be US$670 billion by 2025 – enormous headroom and tremendous growth opportunities for us.”
He singled out “one particular trend … the e-mobility disruption” as providing a particular opportunity for the business.
“Everybody talks about e-cars – the Teslas, the Lucids of the world. However, consumers are starting to switch or complement their cars with e-bikes.
“And in terms of units sold, e-bikes are projected to grow six and a half times more versus e-cars – a much bigger trend that plays right to our strengths, because we are the largest full bike e-tailer globally, with 300,000 fully assembled bikes shipped every year.
“In that bike business, e-bike has a high share, growing with more than 100% CAGR over the last six years. And our e-bikes have a high share of owned brands – 30% of owned brands with higher margin structure.
“Hence this e-mobility disruption alone is a huge growth driver for our business in the coming years,” he added.
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