Riddell is the name written across the front of most National Football League (NFL) football helmets.
It was this factor, Riddell being a premium brand, combined with the stability the branded athletic equipment industry represents, that caused Lincolnshire Management Inc. to acquire Riddell Inc. for $61 million.
The deal was made through Lincolnshire’s $300 million Lincolnshire Equity Fund II, LP. It is the fifth transaction of the fund, but the first in the branded athletic equipment and game apparel sector, and as such, the plans to use it as a platform for add-on acquisitions.
“The demographics are strong,” said Mike Lyons, senior managing director at Lincolnshire. “Sports leagues from colleges and high schools [and younger] use Riddell, and there’s kind of a baby boom right now” in this age group. “And given today’s economic environment,” he added, the sector “is a stable and growing [one].”
Riddell has three divisions: team sports, which sells game equipment, apparel and reconditioning services; the retail division, which sells Riddell branded products based on NFL, Major League Baseball and NASCAR trademarks; and licensing, which licenses the Riddell and MacGregor trademarks to other manufacturers.
“We are very excited about the growth prospects in each segment of the business,” Lyons said.
GE Capital, Comerica and PNC also invested in Riddell, the latter contributing mezzanine financing and a small portion of equity, while the former two contributed senior debt.
Lyons said it was too soon to say what percentage this new sector will come to represent of Fund II’s portfolio. (The other sectors the firm likes include outdoor signs, transportation and curtain wall manufacturing.) However, he did say, “we don’t want to overweight the portfolio in any one direction.” He expects another 10 deals to be made before the fund is fully invested.
Regarding exits, Lyons said, “it’s a little too early to discuss exits.” For now, the firm is focusing on using this first sports equipment acquisition and using Riddell as a platform to grow from there.