Fanatics joins Hillhouse Capital to start operations in China


A detailed photo of Fanatics apparel displayed at NFL Hospitality during the 2018 NFL Annual Meetings at the Ritz Carlton Orlando, Great Lakes on March 26, 2018 in Orlando, Florida.

Mark Brown | fake images

As Fanatics continues to delay a possible initial public offering, the sporting goods company is busy expanding its global operations, this time in China.

The company led by Michael Rubin is starting Fanatics China, a joint venture with investment firm Hillhouse Capital, an Asia-focused private equity fund with companies in the Asian e-commerce and retail sectors, the company told CNBC.

Sources close to the deal told CNBC that Fanatics expects “the company alone to exceed $ 1 billion in business in China.” The people asked to remain anonymous as the company does not speak publicly about the financial terms of the association.

With the deal, Fanatics could be closing in on an IPO. When asked if there were any updates on the way, a company spokesperson told CNBC: “While an initial public offering is clearly an available path for us, there are no updates on any schedule.”

Fanatics China will be headquartered in Shanghai and will allow the e-commerce powerhouse to open up its sports licensing market in the country for its more than 300 global partners, including investors from Major League Baseball and the National Football League, plus various American professionals. teams looking to grow their business in China.

One of the main licensed sports categories in China is soccer. Thus, this partnership enables Fanatics, which generates more than $ 3 billion in sales, to better execute e-commerce partnerships with European clubs, including Chelsea, Manchester United, Paris-Saint Germain, and Bayern Munich.

Hillhouse was founded by Chinese businessman Zhang Lei and also backs sports retailer Topsports International Holdings, which raised $ 1 billion in 2019 by listing its IPO in Hong Kong, according to Bloomberg.

Topsports is one of the largest sports retail companies in China, operating more than 20,000 Nike and Adidas retail stores.

In 2018, the PE firm went through a $ 10.6 billion increase and is now trying to top it with a $ 13 billion increase. It would be the largest US dollar-denominated fund in Asia, according to Reuters.

Quavo performs onstage at Michael Rubin’s Super Bowl Fanatics Party at the Loews Miami Beach Hotel on February 1, 2020 in Miami Beach, Florida.

Kevin Mazur | fake images

Fanatics is coming off a 2020 in which the company raised $ 350 million in a Series E (its latest round of funding), which increased its valuation to $ 6.2 billion. The Florida-based company upgraded its parent umbrella with licensed sports merchandise firms to strengthen its vertical trading units, including the acquisition of licensed manufacturer WinCraft, CNBC reported in December.

Fanatics China will use the company’s e-commerce business model and local market knowledge from Hillhouse in an effort to grow and maximize online market opportunities, build e-commerce sites for leagues and teams, design and launch new stores. retailers and develop and manufacture porcelain consumer products.

With the addition of China, Fanatics increases its global presence outside of the US, as it also operates in the UK, Spain, Japan, Germany, Thailand, Australia and India.

Other Fanatics investors include SoftBank Group and e-commerce firm Alibaba Group, co-founded by the owner of the National Basketball Association team, Joe Tsai.

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