Apr 29, 2023; Mexico City, Mexico; New Era caps are on display at an MLB World Tour game at Estadio Alfredo Harp Helu. Mandatory Credit: Kirby Lee-USA TODAY Sports/File Photo Obtain Licensing Rights
NEW YORK, Sept 7 (Reuters) – New Era Cap LLC, a supplier of major U.S. sports league headware, has begun preparations for an initial public offering (IPO) in New York that could be worth $4 billion to $5 billion, according to people familiar with the matter.
New Era, which makes caps affiliated with the National Football League (NFL), Major League Baseball (MLB) and the National Basketball Association (NBA), is inviting investment banks and law firms to participate this month for in the roles of the stock market debut, the sources said.
The company, which is controlled by its founding family and in which private equity firm ACON Investments has a significant minority stake, aims to go public in 2024, the sources said. MLB, the NFL and the NBA hold minority stakes in New Era.
The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) could reach or exceed $300 million by 2023, the sources added.
The sources asked not to be identified because the matter is confidential.
Kevin R. Wilson, New Era’s executive vice president and chief financial officer, said the company is “always considering alternatives to position the company financially for future growth, but we have no strategic plans to share.” at this time. We do not comment on speculation,” .
An ACON spokesman said the company continues to evaluate “all strategic alternatives” for New Era but declined to comment specifically on IPO plans.
The IPO market is heating up after a dry spell that lasted nearly a year and a half. Chip designer Arm Holdings Ltd, grocery delivery service Instacart and marketing automation platform Klaviyo are among companies working on multibillion-dollar offerings expected this month.
New Era was started in 1920 in Buffalo, New York, by German-American businessman Ehrhardt Koch, who borrowed $5,000 from his aunt to launch a business focused on making men’s caps, known as Gatsby or Ivy League caps, which match men’s suits. .
The company is now headed by Chris Koch, the fourth generation scion of the family. He recently turned over day-to-day operations to his lieutenants, Jim Grundtisch and Jim Patterson.
New Era’s flagship 59FIFTY cap is regularly worn by celebrities on runways and red carpets. It was launched in 1954 and was adapted for select teams in the MLB, the NFL and the NBA.
New Era clothing products are now sold in more than 1,000 stores worldwide in more than 125 countries, according to the company.
Last year, ACON Investments increased its ownership stake in New Era and launched a $700 million “continuation” fund for investors who want to participate in it.
Separately, Chris Koch told Bloomberg News on Thursday that New Era has secured a $600 million refinancing loan from banks.
Reporting by Abigail Summerville, Echo Wang and Anirban Sen in New York; Editing by David Gregorio
Our Standards: The Thomson Reuters Trust Principles.
