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By Abigail Summerville
(Reuters) - New Era Cap, a supplier of major U.S. sports league headware, has agreed to acquire sports lifestyle brand '47, people familiar with the matter said on Thursday.
The deal between two family-founded brands will create a company that generates around $2 billion in annual revenue, the sources said, requesting anonymity ahead of an official announcement.
New Era, which makes caps affiliated with the National Football League (NFL), Major League Baseball (MLB) and National Basketball Association (NBA), has also been preparing for an initial public offering, Reuters reported last year.
At that time, sources said New Era could fetch a $5 billion valuation in its stock market debut. The combined company is now expected to fetch more. Further financial details could not be learned.
The acquisition of '47 is expected to close by the end of 2024, and the IPO would then follow, the sources said.
New Era declined to comment, while'47 did not immediately respond to a request for comment.
New Era is controlled by its founding family, and private equity firm ACON Investments holds a significant stake.
German-American businessman Ehrhardt Koch started New Era in 1920 in Buffalo, New York when he borrowed $5,000 from his aunt to launch a business focused on making men’s fitted caps, known as Gatsby or Ivy League caps, that would match men’s suits.
The company is now led by Chris Koch, the fourth-generation scion of the family. Last year, he delegated day-to-day operations to his lieutenants, Jim Grundtisch and Jim Patterson.
New Era's flagship 59FIFTY cap is donned often by celebrities on runways and red carpets. It was launched in 1954 and customized for select teams in MLB, the NFL and the NBA.
'47 was started by twin brothers Arthur and Henry D'Angelo in 1947 in Boston, Massachusetts, when they sold sports memorabilia outside of Fenway Park. Arthur’s four sons co-own the company.
'47 also sells hats and apparel affiliated with major US sports leagues.
(Reporting by Abigail Summerville in New York)
