Groupe Bruxelles Lambert Takes Majority Stake In Canyon Bicycles

Dec 15, 2020
by James Smurthwaite  
Inside Canyon

Groupe Bruxelles Lambert, one of the biggest investment companies in Europe and the largest shareholder in Adidas, has been selected as the majority shareholder for Canyon.

We reported on Canyon's search for a new investor in October and, despite attention from Carlyle Group and KKR & Co, along with buyout firms Advent International, Apax Partners, General Atlantic and Permira, GBL was today announced as the partner. We reported at the time the sale was expected to bring in up to 500 million euros ($592 million) for Canyon but no final figure has been disclosed following the release earlier today. The Financial Times reports that GBL did not offer the highest bid but Roman Arnold, the founder of the brand, chose GBL based on its "long-term investment perspective".

In the past seven years, the average growth of the German direct-sales business has been at 25 percent and in 2020, sales topped 400 million euros for the first time. Canyon says it expects the new partnership to, "accelerate the high level of innovation, expertise, technology leadership and customer service proposition" of the company while also placing a focus on "future sustainable mobility concepts".

As part of the transaction, Tony Fadell will also co-invest alongside GBL and be a member of the Advisory Board. Tony was the SVP of Apple’s iPod Division and led the teams that created the iPod and the iPhone. Arnold is to remain the largest individual shareholder of the brand with 40 percent while TSG Consumer Partners has exited its minority stake in Canyon

bigquotesWe’ve become a global, digital champion through steady success. Through technology, global expansion and sporting success, we have accomplished a lot. Now is the right time to go further on the offensive, to take advantage of all the opportunities - and they are many. That's why I'm very pleased to partner with GBL, who have convinced my team and me with their passion for our business, years of experience and long-term focusRoman Arnold, Canyon Founder and Chairman of Advisory Board

bigquotesCanyon has an incredible track record, a strong team and great potential. We are very happy to partner with Roman Arnold and the Canyon team. Together we want to take the success story to the next level.Ian Gallienne, Chairman of GBL

Robert W. Baird & Co. Incorporated (Baird) investment bank acted as an exclusive financial advisor to Canyon in the investor search. The transactions are expected to be completed during the first quarter of 2021, once the necessary regulatory approvals have been obtained.


80 Comments

  • 51 4
 Compliment again to the company management of Trickstuff.
  • 21 1
 I suppose it’s a little easier to adopt their policy when you turn over a fraction of a percentage of Canyon.

I am part owner of a small business, we look after staff, look after our customers in the same kind of way trick stuff do, but we are also nothing but a dot on the landscape compared to a 400 mil turnover company where the culture just has to be different, plain and simple.
  • 13 0
 @justanotherusername: I guess you are happy and your customers also. that's what counts mate!
  • 4 0
 @justanotherusername: Well, I don't think Canyon is a bad company or a bad employer. And as a Canyon customer I had a good experience. That amount of money just doesn't feel like "healthy growth". But what do i know ... my financial growth isn´t healthy either Wink
  • 4 0
 I'm out of the loop, what's this got to do with Trickstuff?
  • 3 0
 @Benjou: Ah I see what you mean - and I agree with that.

@vhdh666 - Sure, Benjou makes a lot of sense, I just know the more you grow the more difficult it is to retain the things that you find important - I can imagine it’s why the owner of YT stepped down and Jeff stepped down from Intense.
  • 41 4
 I feel like Canyon will now be able to become more Specialized in their innovation. Possibly become a Giant of the industry. They are going to explode to the next level like a match to Propain. But I'm curious about this whole Transition. Could be very Intense.
  • 1 0
 Bold statement.
  • 12 0
 Let's just hope they don't turn Evil.
  • 1 0
 @richard01: Only Evil is Evil
  • 6 0
 Only time will tell if they Scott what it takes to come home with a Schwinn
  • 2 0
 @richard01: Or Sick
  • 2 0
 I always Felt they had it in them.
  • 1 0
 @twhart20: when you call one of your colors Rusty Trombone! Hahahahaha
  • 29 0
 The comments so far are an example of how to fail at reading comprehension.
  • 6 0
 I think they need to start teaching basic financial literacy in high school
  • 6 1
 @friendlyfoe: in America? hahahaha. we don't even learn that shit in college, and I went for corporate finance & financial analysis.
  • 3 6
 @sjma: Sounds like the community college you went to did teach you anything then.
  • 23 2
 What!?? they can afford $592,000,000 but can't make shoes that will fit me? Thhhpppptbbhhh!
  • 24 2
 and thats exactly why they dont make shoes that fit you.
  • 5 2
 @gaffney92: Erm, Why? I am not sure what you mean.
  • 9 0
 Not all of us have hobbit feet. They fit my feet perfectly!
  • 6 1
 @jomacba: I wear every single pair of shoes (from dress shoes to military boots) for the last 10 years in EU 42. EU 42 fivetens are way too small for me.
  • 2 0
 Apparently they also cannot keep their website updated. Oh well. Canyon will be operating as its own thing, as opposed to fiveten which was just kinda swallowed by Adidas.
  • 18 0
 I think you misunderstand. GBL has invested in Canyon. Adidas has nothing to do with Canyon. The article mentions that GBL also has a stake in Adidas. That's the only correlation.
  • 2 0
 @jomacba: If you are referring to the size of my feet...

I run around in the Summertime without shoes so my toes spread back out. My little toe is no longer brutally smashed into my other little toe. I was only complaining about width.
  • 6 0
 @rosemarywheel: dude your wellbeing regime is on point. Gotta up my toe game bro so I can live my best life
  • 3 0
 @browner: I am not sure if this is sarcasm, but do enjoy the feel of warm grass on you toes, my freind.
  • 3 0
 @YanDoroshenko: 510 is the only brand of cycling shoe that fits me. I think they make US sizes then convert it to EU. As a 44.5 I can never fit in 44 or 45 and not many companies make half sizes so it is nice having one option out there for shoes that fits.
  • 8 0
 @rosemarywheel: "I was only complaining about width"....that's what she said.
  • 2 0
 @blowmyfuse: Smile ... Big Grin ...... lol !
  • 3 0
 @YanDoroshenko: Process of elimination is a beautiful thing, guess you better size up to an EU43!!
  • 1 0
 @rosemarywheel: Sounds like your a perfect candidate for Shimano's SD-501A
  • 14 5
 I'm probably ok with this. If they are going to sell, I'd prefer it to not be to a private equity firm. First thing that happens whenever a PE firm takes over is to try and cut corners on quality standards.
  • 9 0
 I'm a bit confused what you would define Groupe Bruxelles Lambert as if not private equity?
  • 1 1
 @Rhojax: It is publicly traded, GBLB
  • 2 0
 @davevdw: Shareholder value creation through the roof.
  • 15 1
 Where could Canyon possibly cut on quality standards???
  • 5 0
 @davevdw: private equity firms can be publicly traded.
  • 2 0
 @friendlyfoe: in fact, KKR, a firm listed as a potential investor in this article, is a publicly traded firm in which private equity investment is a large aspect of their business.
  • 3 0
 @VwHarman: Finance terms can be confusing because they often have very specific meanings. In this case private doesn't refer to the company doing the investing but the company being invested in. If you invest in a private company by purchasing a portion of the company it is private equity. If you purchase stocks in a publicly traded company it is public equity.

Private equity firms can be arranged as both a limited partnership or as a publicly traded company. Technically GBL is not a "private equity firm" but an investment group that invests in a wide range of assets. In a way the OP may be correct that a company that only does PE is possibly more likely to come in and try to maximize profits whereas an investment group might be more likely to make a private equity investment then take a step back. That really just comes down to how they manage their private equity portfolio though. Regardless this purchase is most definitely a private equity investment as Canyon is a private company.
  • 1 0
 @unrooted: There is room. Given how loose the BB tolerances (Cannondale, Cervelo and pretty much everyone) are getting nowadays they have quite some space to get worse. From what I heard in the past about YT they aren't the only DTC with problems.
  • 9 1
 Limited edition Canyon 510 edition incoming......
  • 16 9
 First Fiveten and now Canyon gets these ugly three stipes :-P
  • 16 4
 Wether you like their designs or not, Adidas is one of the very few clothing companies in the world that is 100% clean (no slavery/underpayment and normal hours and safe conditions in the factories, no dumping waste in the nature, etc. etc.).

I heard from a reliable source that even when they collaborate with other brands, Adidas will spend the first two years researching if the brand they collaborate with is 100% clean. Even their complete supply chain all the way until the raw materials, even for the tiniest pieces of material used in any of its products.

For me, that makes Adidas the best (sports) clothing company and one I fully support. I hope other brands will follow their example soon.
  • 7 0
 @chridel If you read the article you will see Adidas has nothing to do with Canyon other than the same investment firm... So no not under the 3 stripes of Adidas.
  • 3 3
 @danielstutt: man.. Can you just let a joke be a joke.. Who serousily thinks somebody would brand a bike as Adidas ????
  • 6 1
 @Mattin: whaaaat who belives that. Just Google and there is about 10 pages of examples against... I would guess non of the big players is 100% clean. Where should they produce such masses with that low cost. Little ones like vaude maybe are...
  • 4 0
 @Mattin: I'm completely ignorant to adidas' dealings (except of course that they didn't want to pay rent when the pandemic hit), but would like to see how they're "100% clean." A quick google revealed other, not so 100% clean information. It looks like they try fairly hard for a company of their size, but it's pretty bold to state that a multinational, multi-billion dollar corporation is "100% clean."

As an aside... It's 2020 and we're in the ("information") internet age. Beginning a sentence with "I heard from a reliable source" is akin to "my cousins sisters brothers girlfriend said..."
  • 1 0
 @Mattin: I'm also an Adidas fan. Been wearing them since the late 60's when my first pair were the Rom's, the white with blue stripes and they were at that time made in France. Later I could buy Rom's made in Toronto, until Adidas switched over to the Gazelle. My last two pair have been made in Indonesia, an original white and blue stripes I had to order on ebay, and then a red with white striped pair that I purchase in a used consignment store in Luzern.
Now if they would bring back a pair of hi-end Sidi styled shoes in their old Merckx, with the stripes at the back in the heel area.
A big company like Adidas is under the watchful eye of the rest of the world.
As for Canyon, I don't know much about them other than they sponsor the big UCI Moviestar team, and I thought they were just a mail direct company.
  • 1 0
 You guys are right, I should not have used the words "100% clean".

But they are doing really welll and are indeed one of the best companies in their industry when it comes to their social responsibility.

Even more importantly (in my opinion), because the clothing industry is really behind in this, so it's good that companies such as Adidas are making a change.
  • 2 1
 @Mattin: bullshit
  • 1 0
 (just search for adidas exploitation, this company has a long standing tradition of giving a **** concerning labour and other standards)
  • 1 0
 @dtheio: If you check out the GBL website you will find a list of the companies that they have invested in. Adidas is lucrative, but you will see that there are other companies in their portfolio that are worth a lot more. Why so much passion for a mail order company that has been supplying bikes since 1996? They are not an old established brand with a long history.
Their presence had been increased globally by their road ex-poser in with the Movistar team. The brand is now on the rise, so it is a smart business move.
Colnago which has 66 years of history was purchased early this year by Chimera Investments LLC a company based in Abu Dhabi. It upset a lot of fans, but that's the way the cookie crumbles when you have a product of some worth.
  • 1 0
 @bowser07: I don't agree with: They are not an old established brand with a long history. It's relative: they are VERY established compared to other brands selling b2c
  • 3 0
 25% CAGR over 7 years has got to put some insane stress on the company, never mind a global supply chain crunch at the same time as never-before-seen levels of demand for your product. Having access to fresh liquidity and Adidas-levels of management experience is going to be spectacularly helpful for Canyon in the mid-long term. GBL is going to make a handsome chunk of change off of this endeavor and hopefully more people can get out on value-priced bikes. I expect to see a lot more PE and activist investors eyeing the cycling industry soon.
  • 3 0
 "I expect to see a lot more PE and activist investors eyeing the cycling industry soon"

Not sure that'll be an improvement for the employees and customers...
  • 1 0
 @Mac1987: not necessarily, no. In Canyon's case, the injection of funds can be used to order larger batches of frames / builds from their suppliers, increase their support network in critical growth/underserved markets, invest in R&D, pay down high interest debt (and thus lower sale prices or just improve their margins on existing sale prices) etc etc etc. All of these could result in superior value for their customers which would then result in superior value for their shareholders, but this may not directly align with the values of their stakeholders.
  • 3 0
 @sjma: Usually when a PE buys into a company they cut off personal and lower the expenses. Mostly it translates in a worse end product and worse customer relation. Now if GBL will look further than an Excell table and only help financially and with knowledge in global distribution to more easily grow or handle this increase of sales, Canyon has a bright future ahead. But if they will put a young-ish exec who will try to take the most profit out of it, the product will get worse very quickly. And your wish that the prices will get down, Canyon is raising their prices more than any other bike manufacturer. They are already at a level of some LBS manufacturers.
  • 4 1
 I'm hopeful that the investment firm takes a more hands off approach. Thankfully Canyon does not fall directly under Addidas
  • 4 1
 Canyon has a horrible history of CS and replacement parts. . . so hopefully Adidas does get involved.
  • 1 1
 Funny that they mention „customer service“. They have none! You hardly ever get an answer to an e-mail question, even if you were dumb enough to actually buy a bike there (and want to know if and when it will be delivered. And don‘t expect them to have spare parts for a two-year old bike... for it was once and never again...
  • 1 0
 "future sustainable mobility concepts" means e-bikes and scooters etc for commuting/transport I guess. It's a huge industry in the next 20 years as cities centres are closing for fossil fuel powered transports.
  • 2 1
 My only question, does this have any effect on them finally getting to Canada? Hopefully the Canadian site can get populated soon Smile
  • 2 0
 Canada impose a pretty hefty import duty on bicycles in order to protect their domestic production. That would eliminate the price advantage that Canyon has over many IBDs I am guessing. I have not been involved with the supplier side of the bike industry for years now, but previously that had been a barrier to importing into Canada.
  • 1 0
 @Meridian-Cycles: Thanks for that info. Commencal and YT still both tend to come a little under what the competition can offer price wise, but it is often not by a huge amount. Non-the-less, Canyon appears to make some nice bikes and wouldn't mind the option someday.
  • 2 1
 Canyon will probably care more about profit margins than customers. I am sure these "direct sale" bike will cost the same as your LBS.
  • 2 0
 at least they weren't bought out like Schwinn to the lowest chinese builder of walmart bikes
  • 2 0
 Does this mean their prices of bikes are going up? Razz
  • 2 0
 Again?
  • 1 0
 So Canyon is associated with Adidas now... great. That means their bikes will now be non-boost, and a half size small.
  • 1 0
 I get it.. Addidas is on a mission to single-handedly ruin the entire mountain biking industry, one brand at a time.
  • 1 0
 I wonder if Claw will get pulled back into the brand through this deal?
  • 5 6
 Now that Adidas have a share does it mean the tires will start to go within a couple of months of riding on flats? :-0
  • 4 0
 They just have a common investor, not ownership.
  • 1 2
 Bruxelles buy Canyon! Belgian technology beats Germans!

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