Pacific Cycle Owner Dorel Acquires Cannondale
MONTREAL, Canada – Dorel Industries Ltd. today announced it has acquired the Cannondale Bicycle Corporation and Sugoi Performance Apparel. Dorel President and CEO, Martin Schwartz stated that a new Dorel Independent Bicycle Dealers (IBD) division, the Cannondale Sports Group
MONTREAL, Canada – Dorel Industries Ltd. today announced it has acquired the Cannondale Bicycle Corporation, a leading designer, developer and manufacturer of high-end bicycles. Headquartered in Bethel, Connecticut, Cannondale has facilities in Bedford, Pennsylvania as well as offices in Canada, Switzerland, Holland, Japan, and Australia.
Widely regarded as the bike industry’s leading innovator, Cannondale’s handcrafted bicycles have won numerous design awards and are sold in over 70 countries. The purchase also includes Sugoi Performance Apparel. Sugoi products are used worldwide by runners, cyclists, triathletes and fitness enthusiasts who demand the best apparel available. The total value of the all-cash transaction will be US$190 to US$200 million, subject to Cannondale’s earnings results for the year ending June 30, 2008.
The transaction, which will be immediately accretive to Dorel’s earnings, is being financed through debt. Cannondale and Sugoi are being purchased from an affiliate of Pegasus Capital Advisors, which acquired the company in 2003. 2007 sales for Cannondale and Sugoi were approximately $200 million.
A clear strategy for the IBD category
Dorel President and CEO, Martin Schwartz stated that in light of the acquisition the Company’s Recreational/Leisure segment is being split into two distinct operating divisions. A new Dorel Independent Bicycle Dealers (IBD) division, the Cannondale Sports Group, is being created and will focus exclusively on this category with premium-oriented brands.
Backed by Dorel’s extensive resources, the Cannondale Sports Group will build on Cannondale’s strengths to grow significantly within the IBD channel. “Our intention is to build a world-class company that dealers will want to buy from,” said Mr. Schwartz.
Pacific Cycle Stand-alone
Pacific Cycle will become a stand-alone division with an exclusive focus on mass merchant customers. “The Cannondale purchase is consistent with Dorel’s plan to concentrate on its core businesses. Since buying Pacific Cycle in 2004 we have learned a great deal about the bicycle industry and have found it to be a true value driver for Dorel.”
“We are committed to pursuing this sector, and this important transaction will position us globally in a most material way. Dorel recognizes the importance and potential of the Independent Bicycle Dealer channel and is purchasing Cannondale as the first step to become the world’s number one IBD player. Cannondale will be the crown jewel of this new Dorel division, which will seek additional such growth opportunities.”
- For related items on Cannondale, click here
- For related items on Sugoi, click here
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