Stephan Zoll, CEO of Signa Sports United, joined Benzinga’s "SPACs Attack" show Monday.
The sports e-commerce company announced last week that it will be going public via a SPAC merger with Yucaipa Acquisition Corporation YAC.
SPAC Vs. IPO: Zoll said Signa identified two important advantages of going public via a SPAC instead of a traditional IPO.
“One is that we can actually talk about the growth in the future because we can project and talk about projections like you can’t do in the regular IPO process. That’s important to us because we have so many opportunities for growth, and we want to inform investors of that,” Zoll said.
“And second and probably more important, with a SPAC we also did an acquisition of a very large online bike retailer out of the U.K. called Wiggle CRC.”
The merger with Wiggle was occuring at the same time as Signa's SPAC deal, which wouldn’t have been possible during a traditional IPO process, he said.
The combined company is expected to generate $1.6 billion in revenue and $70 million in EBITDA for the fiscal year ending in September 2021.
Zoll On Signa's Game Plan: Signa has chosen to focus on four main categories: cycling, tennis, team sports (largely soccer and basketball) and outdoors, which differentiates it from other sports e-commerce retailers that aren’t specialized, Zoll said.
Eighty-nine percent of the bike products the company sells can’t even be found on Amazon.com, Inc. AMZN, the CEO said.
Biking is the company’s largest growth driver, and Zoll said the company is following several long-term growth megatrends within the biking category, including e-mobility disruption.
“We’ll see 130 million e-bikes coming to market in the next three years alone, and that’s super relevant for us because ... we are by far the largest online bike seller in the market globally,” he said.
In addition, the CEO said an increased focus on health and lifestyle will continue to serve as a tailwind for bike sales, as well as sports digitalization and a general retail shift in offline sales to online sales.
“You see more and more trackers, devices, cameras, apps and sensors for everything when you do sports, right? In a bike, in an e-bike, you have all kinds of sensors already. There’s more and more coming. In a tennis racket you will find sensors soon. So all of that digitalization is driving parts of the growth,” Zoll said.
US Tennis Aspirations: Outside of the biking category, Signa is in the process of making a big splash in the U.S. tennis market by closing two acquisitions of online tennis retailers that will put Signa roughly in-line with the size of the U.S. tennis e-commerce market leader.
The company has longer-term plans for creating a comprehensive, engaging online tennis platform in the U.S., Koll said.
“Not just plain vanilla e-commerce, but trying to cater to the needs of the tennis enthusiasts and bring together the industry to the benefit of the consumer, that’s eventually our game plan,” he told Benzinga.
Photo courtesy of Signa Sports.
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