Private equity firm Bain Capital announced an agreement to buy Varsity Brands Inc., a company that focuses on school spirit and produces apparel and equipment for cheerleading, football, and other sports, on Tuesday, June 19. The terms of the acquisition were not disclosed, but the deal is believed to be worth about $2.5 billion, according to sources who spoke with CNBC.

With the acquisitions, the firm aims to focus on e-commerce business to support product sales, including cheerleading uniforms, class rings, cheerleading camps, and others.

This deal gives Bain Capital competitive advantages by building the digital side of the business, creating a big platform to purchase team merchandise online, and buying up smaller businesses.

"This new partnership presents Varsity Brands with an exciting opportunity to continue to expand and improve our products and services," Adam Blumenfeld, chief executive officer at Varsity Brands, said in a statement.

"Bain Capital's extensive consumer and technology experience and their commitment to our mission of empowering young people will help us accelerate our growth to a new level."

Lobbying for Olympic status

The deal is significant in terms of cheerleading, which has grown in popularity and has now evolved into a billion-dollar business. In fact, as New York Post noted, its cheerleading business reported $2 billion in revenue.

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The Sports & Fitness Industry Association, a Silver Spring, Maryland-based non-profit organization, found in 2016 that more than four million people from elementary school through college across the United States participated in cheerleading.

Over the years, enthusiasts attempted to urge the International Olympic Committee's executive board to classy cheerleading as the sport and allow it to become part of the Olympics.

Eventually, in 2016, the sport was approved by its committee and given Olympic status. The International Cheer Union (ICU) is eligible to receive $25,000 annually from the IOC to put toward participation in future Olympic events.

Varsity Brands' previous acquisitions

In 1974, Varsity Brands owner and former University of Oklahoma cheerleader Jeff Webb originated the Universal Cheerleaders Association (UCA) with the ultimate goal of bringing the cheerleading into the dynamic, athletic enterprise.

Throughout the 1980s, when the company grew significantly, Webb formed Varsity Spirit, a cheerleading organization that oversees educational camps, team uniforms, and competitions.

CNBC reported that in 2011, Varsity Brands reached a deal to merge with Herff Jones, a company that markets educational products such as class rings, caps and gowns, and yearbooks. The report also noted that in 2013, the combined company purchased Texas-based BSN Sports, widely regarded as the nation's largest marketer and distributor of team sports equipment and apparel.

In 2014, the investment group led by private equity firm Charlesbank Capital Partners bought Varsity Brands in a $1.5 billion deal seeking to increase its presence in the primary markets, according to a report. During the Charlesbank's ownership, Varsity Brands acquired several direct sporting goods and apparel firms, including Ohio-based Newberry Sporting Goods and Kentucky-based Lowe's Sporting Goods.

Copyright infringement lawsuit

While the Memphis-based cheerleading apparel company sought to acquire sporting goods firms, Varsity Brands previously filed a lawsuit against cheerleading retailer Star Athletica over copyright infringement, which drew a national spotlight at the time. As the Supreme Court listened to the argument about the case that determines who owns the staples on cheerleader uniforms, the high court granted a victory to Varsity Brands for the copyright law protections.

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