Shares of the global investment firm KKR (NYSE:KKR) are in the spotlight for its recent deals. According to a Reuters report, KKR is acquiring Varsity Brands from Bain Capital for about $4.75 billion, including debt. Varsity Brands is an apparel company focused on academic and sports uniforms.
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According to the report, the company will own Varsity Brands through its private equity fund. The deal will help KKR earn steady returns as sports apparel businesses generate reliable cash flows.
Varsity Brands operates through two primary businesses: BSN SPORTS and Varsity Spirit. The BSN SPORTS business partners with leading brands such as Nike (NYSE:NKE) and distributes customizable team sports equipment and apparel. On the other hand, Varsity Spirit sells cheerleader uniforms, hosts educational camps, and produces school yearbooks.
KKR Pursues Instructure Acquisition
In a separate development, KKR is competing with Francisco Partners to acquire Instructure (NYSE:INST), an education technology company. INST stock is down about 13% year-to-date and sports a market cap of over $3.4 billion.
Is KKR a Good Stock to Buy?
KKR’s recent investments highlight its focus on sectors such as sports apparel, education, and real estate. Earlier, KKR acquired a portfolio of 18 multifamily assets for $2.1 billion from Lennar’s (NYSE:LEN) subsidiary. KKR aims to capitalize on the recovery in the housing sector through this investment.
Wall Street analysts are bullish about KKR’s prospects. According to the TipRanks Stock Analysis tool, “Bulls Say, Bears Say,” analysts bullish on KKR stock favor its strategy of leveraging its differentiated business model and a diverse set of products to drive earnings.
KKR stock has gained over 28% year-to-date and has a Strong Buy consensus rating based on 10 Buys and one Hold recommendation. The analysts’ KKR stock price target is $120, implying 13.14% upside potential from current levels.
