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Pon Holdings Buys GT, Cannondale, Schwinn & More in $810 Million Deal

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Dorel Sports has today announced it will be selling its bicycle division to Pon Holdings in an $810 million deal.

Pon Holdings currently owns Santa Cruz, Focus and Cervelo but will now be able to add brands such as Schwinn, Cannondale and GT that all fall under the Dorel Sports umbrella. Pon.Bike is claiming that the acquisition will allow it to generate an expected annual revenue of €2.5 billion, which, if true, could make it the biggest bicycle company in the world, replacing Giant Bicycles who announced annual revenue of $2.45 billion annual revenue in 2020.

Pon.Bike will be made up of:
Former Dorel Sports brands

– Cannondale
– Schwinn
– Mongoose
– GT

– Charge
– Caloi
– KidTrax

Current Pon.Bike brands

– Gazelle
– Kalkhoff
– Focus
– Santa Cruz
– Cervélo
– Swapfiets

– Urban Arrow
– BBB Cycling
– Lease a Bike,
– Union
– Reserve Wheels
– Juliana

Pon described the deal as a “logical step” and said it can learn from Dorel’s e-commerce experience. The Dutch conglomerate is positioning itself to be a “global leader in ebikes” and this acquisition means that 70 per cent of its brands now offer bikes with motors. It sounds like we can expect more eMTBs from Dorel’s brands in future too as Pon.Bike claims that Dorel’s brands will benefit from its “innovation, design, knowledge and creativity” and “can leverage the experience of Pon.Bike with electric bikes”. The move also grants Pon greater access to the US market through brands such as Schwinn, and even to the South American market through Caloi.

bigquotes Today’s step is a milestone in the creation of a world-leading bike company with a variety of quality brands. With the acquisition of Gazelle in 2012 we launched a strategy that step by step led us to the 1.5 billion in revenue bike group that we are today, with great comfort and performance bicycle brands, of which 70 percent electric.

As a result of this strategy. We have now reached a highlight with the acquisition of Dorel Sports. They have a rich history with their iconic bike brands all with an impressive heritage. Schwinn is an institute in the US. Caloi the pride of Brazil. And Cannondale is a truly global brand with an excellent reputation. Dorel Sports really is complementary to Pon.Bike and that’s why this is such a logical step.

Together we can further cater the ever growing demand for quality and electric bikes, whether it’s for urban use, leisure or sports. Biking is not only healthy, it also plays a critical role in fighting inner-city congestion. It’s one of the most sustainable ways of transport. We are determined to make bikes a powerful part of mobility. We look forward to working together with the Dorel Sports people all over the world and welcome them to the Pon family.

Janus Smalbraak, CEO of Pon Holdings

For Dorel, the 100% cash funds raised will apparently be used, “to reduce indebtedness, return capital to shareholders and for general corporate purposes”. Dorel intends to announce specific details regarding the use of the $735 million net proceeds from the sale at the time of closing.

bigquotes Acting on feedback from our shareholders, Dorel embarked on a thorough review of strategic alternatives earlier this year. Our objective has consistently been to create value for our shareholders. The divestiture of Dorel Sports represents a unique opportunity to unlock value by capitalizing on strong demand for scaled assets in the bicycle segment.

On behalf of the Board of Directors, I extend my sincere thanks to the entire Dorel Sports team for their outstanding efforts over the years. Dorel Sports has been an important part of our organization since 2004 and we are very proud of the global success it has achieved. While making the decision to sell Dorel Sports has been difficult, we are confident that this transaction represents full value for Dorel shareholders.

Martin Schwartz, CEO and founder of Dorel

Pon first entered the high end mountain bike market in 2011 when it purchased Derby Cycles, the parent group of Focus. Since then it has purchased Santa Cruz in 2015 and apparently bid $895 million for a takeover of the Accell Group, which contains Lapierre, Haibike and more. In the end, it settled for a 20% stake of Accell, which it sold late last year.

The Dorel Sports transaction has been recommended unanimously by the Boards of both companies and is expected to be closed before the end of the first quarter of 2022. Lazard and ING acted as financial advisors and Goodmans as legal advisor.

More info can be found in the Pon press release, here, or the Dorel Group press release, here.

Read More: Pon Holdings Buys GT, Cannondale, Schwinn & More in $810 Million Deal

2021-10-11 13:31:54

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