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Sports retailer SPAC powers M&A cycle

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Cycling - UCI Road Cycling World Championships - Tirol, Austria - September 23, 2018 Team Sky during the Men's Team Time Trial

LONDON, June 11 (Reuters Breakingviews) - Online sports retailer Signa Sports United is going public via a U.S. blank-cheque company in a deal that values it at $3.2 billion. SSU owns e-commerce and technology brands for sports like cycling and tennis. At 2 times expected sales in the year to September 2021, the valuation is cheap compared to Britain’s THG (THG.L), which has a similar model for cosmetics and trades at almost 3 times forward sales, according to Refinitiv.

SPAC sponsor Ron Burkle, who began his career in a grocery store, gets arguably the best deal. He ends up with stock worth $150 million having invested just a third of that. And SSU gets a dollop of cash to fuel its M&A cycle: on Friday it said it was buying online bike retailer WiggleCRC from Bridgepoint, which also receives shares in the new outfit. The buyout group will be hoping it’s hooked up with a winner. (By Dasha Afanasieva)

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