Customers shop at New Era Cap’s flagship store in Buffalo. The company will make caps and apparel for all NHL teams starting with the 2024-25 season.
New Era Cap Co. is bulking up.
New Era’s deal, announced late Thursday, to acquire one of its competitors in the sport and lifestyle cap and apparel industry, will make it a much bigger player in the market and push its annual sales to around the $2 billion mark.
New Era, based in Buffalo, is purchasing Massachusetts-based fashion brand ’47 with the goal of expanding and diversifying its product portfolio of headwear, apparel and accessories.
The transaction is expected to close by the end of 2024, subject to regulatory approvals.
Financial terms were not disclosed, but ACON Investments, the private equity firm that took an ownership stake in New Era in 2021, will hold a “significant” stake in the combined company, the firms said. New Era said it had lined up financing for the deal through a consortium of seven banks.
The two companies will continue to operate on their own after the purchase is finalized.
Like New Era, ’47 offers a wide range of licensed headwear, apparel and gear, and more recently, has had more of a focus on its fashion and cultural influences.
The move enhances licensing partnerships already in place with many of the largest global sports leagues, including the likes of Major League Baseball, National Basketball Association, National Football League and National Hockey League, in addition to over 900 collegiate programs, NASCAR and European and Major League soccer clubs.
“Through this transaction, we will offer a breadth of products across both brands and enhance how we serve our customers and partners around the world,” said Christopher H. Koch, chief executive officer of New Era. “We will also have opportunities to build on ’47’s strong North American presence internationally in new markets where New Era already has distribution capabilities and a strong customer base.”
The purchase also will unite two family-founded brands.
The D’Angelo family has owned ’47 for generations. The company, headquartered in Westwood, Mass., started more than 75 years ago, beginning as a sales cart outside Fenway Park – the home of the Boston Red Sox. Similarly, the Koch family has run New Era since its beginning in 1920.
“We have known and respected the D’Angelo family and the ’47 team for many years and have tremendous respect for the business they have built,” said Koch, the fourth-generation CEO of the family-owned company.
Following the close of the transaction, the New Era and ’47 brands will continue to serve consumers independently from each company’s respective headquarters, with ’47 led by its president, Dominic Farrell.
ACON Investments, a private equity investment firm based in Washington, D.C., which initially invested in New Era in January 2021 as its first institutional equity capital, will maintain a significant stake in the combined company. The NFL, NBA and MLB acquired minority stakes in New Era during a 2022 fundraising round.
“New Era’s core values of creativity and self-expression, combined with its league partnerships, international presence and global distribution capabilities make them the ideal partner for us,” Farrell said.
Reuters reported last year that New Era was considering an initial public stock offering that would potentially value the company at as much as $5 billion. Reuters reported Thursday that New Era continues to be interested in an IPO, potentially after the ‘47 deal closes later this year.
