Hero Buys India’s Premium Brand Firefox Bikes
LUDHIANA, India – After its recent take-over of Avocet in the UK, India’s Hero Cycles continues its buying spree. The latest to be bought is the home-grown premium bicycle brand Firefox. Hero acquired Firefox Bikes as part of its strategy to further cement its position in the fast-growing premium cycling segment in India.
As part of the deal, both companies have mutually agreed that Firefox Bikes will continue to have its distinct brand identity and remain a separate business entity.
Possibilities for Hero & Firefox brands
Pankaj Munjal, Chairman and MD, Hero Cycles said the Firefox acquisition is one of the most significant ones of the company. “Firefox Bikes is one of the most recognized brands in the premium cycle segment. We are looking at the immense possibilities that lie in front of both Hero & Firefox brands which have distinct branding identities.”
The Firefox owners have sold all their shares in an all-cash transaction to Hero Cycles. When contacted Hero declined to comment on the size of the cash deal. It includes Firefox branded bikes as well as P&A next to the exclusive distribution rights for Trek bikes and others.
‘Good strategic offer’
Shiv Inder Singh, founder and managing director at Firefox Bikes will remain on the company board as CEO. Shiv Inder commented, “We have been looking for investors for quite some time and few private equity investors have shown interest but they won’t stay for long. I am keen that the Firefox brand, nurtured by me, should live on and Hero being formidable bicycle brand known globally is the best to do that.”
On the deal size he said, “It was a good strategic offer with an assurance that Firefox as brand continue to be in the market with gradual expansion thru the existing dealer network.” Firefox sells around 70,000 units annually in India market.
The acquisition aimed at consolidating Hero’s market share, but also expands the horizons for Firefox Bikes. Firefox, which has an established presence pan-India through a network of 160 outlets, has been growing at an annual growth rate of some 35% in revenue for the past three years.
Munjal also stressed that Hero Cycles will further expand its presence in all major categories of bicycles in India through acquisition and its various brands like Hero Cycles, UT, Firefox and UT Edge.
India’s premium cycle segment started its growth at the turn of the century. It’s currently the fastest growing segment in the India market with sales standing at over 200,000 units annually. Firefox was among the first players in India to enter this segment and currently holds a 40% share in this segment. Firefox sells over 70 different models and 25 Trek models through a network of 160 company-owned and franchise outlets. Firefox also has tie-ups with international brands like Tern, Shimano, Saris, Finish Line, Kryptonite, Super-B and Slime. Hero Cycles, which produced 6 million bikes last year, will expand the number of Firefox stores in India, expand the brand’s product portfolio and create better customer reach through greater market visibility and exposure.