Accell To Use Hercules Sale Earnings For More Takeovers
AMSTERDAM, The Netherlands – The 20 million euro Accell Group got for selling its Hercules brand to ZEG is to be used for more takeovers by the Dutch bike holding company. “We are certainly not putting that money in the bank,” said Accell’s top executive Takens at the presentation of the company’s 2013 results last Friday.
Last January 31, Accell Group announced that it had sold its traditional German bike brand Hercules for about 20 million euro to Europe’s biggest dealer cooperative, the German Zweirad-Einkaufs- Genossenschaft eG (ZEG). And that this sale resulted in a book profit of around 3 million euro. A press release on this divestment said, “The sale of the Hercules brand enables us to increase the focus of our German brand portfolio, consisting of Winora, Ghost and Haibike and to further invest in the distinctiveness of our German brand propositions.”
Selling the silverware
At last Friday’s press conference on the 2013 financial results Bike Europe asked Accell CEO René Takens whether the Hercules sale was like selling the company’s silverware after the demanding year 2013? He answered, “We got a good price for Hercules.
Next to that you have to take into account that Hercules was already big at ZEG. They also have their own brands like Bulls and the margins ZEG makes on such brands were also demanded for Hercules branded bikes made by us. With that margins got slimmer and slimmer for us resulting in a low Hercules EBIT.
“Another fact contributing to the Hercules sale,” continued Takens, “Had to do with an earlier reorganization which resulted in the move of Hercules to Winora in Schweinfurt. With that it proved to be harder to create a distinctive image for Hercules compared to our other German brands. And when we had talks in 2013 with ZEG on doing more Hercules branded bikes for them, the idea came up to sell this brand. That’s all finalized now. The earnings that came in with the Hercules sale will be used for further acquisitions.”