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09/24/2020

Academy Sports and Outdoors Sets IPO Price Range

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Academy Sports and Outdoors Is Going Public
The IPO price is expected to be between $15.00 and $17.00 per share. 

Academy Sports and Outdoors has set the price range for its initial public offering.

The sporting goods and recreational products retailer said the offering will include 15,625,000 shares of its common stock.  The IPO price is expected to be between $15.00 and $17.00 per share. 

Academy expects to grant the underwriters a 30-day option to purchase up to an additional 2,343,750 shares of its common stock to cover over-allotments, if any.  Academy has applied to list its common stock on the NASDAQ Global Select Market under the ticker symbol "ASO." 

The retailer said that net proceeds from the offering will go toward general corporate purposes, which may include the repayment of certain indebtedness.

Private equity firm bought Academy in 2011. Originally founded in 1938 as a family business in Texas, Academy has grown to 259 stores across 16 contiguous states, primarily in the southern United States. In 2019, the company’s revenue increased about 1% year over year to $4.8 billion.

Through the twelve months ended Aug. 1, 2020, Academy has posted revenue of about $5.3 billion, according to the retailer's IPO filing document from earlier in September. Net income stood at $204 million for that period. 

The retailer is realizing gains from e-commerce amidst an ongoing $50 million omnichannel investment push — an effort that includes buy online, pickup in store (BOPIS) services, new website design and other tasks.

Academy's e-commerce sales represented 5% and 11% of merchandise sales in 2019 and the first half 2020, respectively. The retailer's BOPIS program, launched in 2019, accounted for approximately 24% and 50% of its e-commerce sales during 2019 and the first half 2020, respectively. "Our website is introducing new customers to the Academy brand, with approximately 25% of our e-commerce sales during first half 2020 coming from new households," the retailer said in its IPO filing document. 

"Academy had been underdeveloped in omnichannel capabilities, but we have been making major improvements to our capabilities that have shown substantial progress and effects over the past year," said Ken Hicks, the retailer's CEO, president and chairman. "We have made numerous website improvements, including increased speed, simplified checkout, expanded payment options, content and product information, and search capabilities. We have increased the connection between our website and our stores through our marketing, inventory, and BOPIS."

The retailer operates three distribution centers. As for its product sales mix, Academy said that "nearly 20% of our 2019 sales were from our owned brands, such as Magellan Outdoors and BCG." 

Academy’s IPO moves comes as other sporting goods retailers enjoy sales gains during the pandemic. Dick’s Sporting Goods provides a solid recent example of that. Its revenue increased 20.1% year over year in the second quarter ended Aug. 1, reaching $2.71 billion — an increase that the company credited, at least in part, to shoppers focusing on health and fitness at home during the pandemic.

For the Academy IPO, Credit Suisse, J.P. Morgan, KKR Capital Markets and BofA Securities are acting as joint book-running managers for the proposed offering.  Evercore ISI, Guggenheim Securities, UBS Investment Bank and Wells Fargo Securities are acting as bookrunners. Stephens Inc., Capital One Securities, Loop Capital Markets, CastleOak Securities, L.P., Blaylock Van, LLC, Cabrera Capital Markets LLC, Ramirez & Co., Inc. and R. Seelaus & Co., LLC are acting as co-managers.

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