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

Oct 11, 2021
by James Smurthwaite  

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 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 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.

Pon described the latest 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.

bigquotesToday’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.

bigquotesActing 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

The 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.

Posted In:
Industry News

Author Info:
jamessmurthwaite avatar

Member since Nov 14, 2018
1,770 articles

  • 222 4
 It’s a big club and you ain’t in it
  • 21 2
  • 32 1
 It’s interesting to look behind the curtain occasionally.
  • 46 3
 Takes out the competition when they raise prices on us.
  • 128 7
 @endurocat: Maybe we should try to flex and pull a Gamestop type power move and get everyone to stop buying bikes until the prices drop back down?
  • 192 0
 Suddenly Specialized is looking more and more like the small red S.
  • 123 0
 Will all our bikes roll on the same chassis in the future I wonder, like VW Audi Porsche Lambo Seat Skoda. Santa Cruz will have leather grips and seat. GT will have the funky colours. Mongoose will have the plastic tyres.
  • 13 48
flag likeittacky (Oct 11, 2021 at 8:59) (Below Threshold)
 Plagiarism; You should've used quotation marks while using George Carlin's work.
  • 4 2
 Now I love Pon?
  • 3 0
 @gnarlysipes: exactly what I was thinking..
  • 56 1
 @dirtmcleod: That's not really what's happened with Gamestop though right? Like this is in no way similar - Pom is looking to add value to their company by buying up companies they think have successful models or that they can bring something to the table with.

By all accounts, Santa Cruz and Cervelo have not shit the bed since they were purchased. Quality has gone up if anything at either or, employees are happy, and their customer focused businesses. Pom isn't a story of buying up distressed companies, shorting them, and loading them up with ungovernable debt to put them out of business for profit. They're just a standard "buy things that add value to the portfolio" fund.

Gamestop had people on the board actively pushing to f*ck it up before Cohen took over. To the best of my knowledge, GT has nothing of that nature, and Cannondales relationship with REI is a strong one. This looks to me like Pom thinks they're either undervalued or can bring something to the table to improve their value.

Donno. I don't have any love or appreciation for Pom, but they also don't seem like their profits are aimed towards pushing companies under, their profits come when their companies succeed.
  • 22 0
 @endurocat: Dorel is a dumpster fire. If they hadn't sold these brands they likely would have been out of business in the next few years. Maybe better for the sport to keep the GT and cdale brands alive?
  • 70 4
 As we all know, massive conglomerates and monopolies always leads to better things for the average person and worker.
  • 7 1
 @friendlyfoe: I love my 2019 GT sensor....hope to get one again when they introduce a new one
  • 2 0
 @William42: this sounds like there will be more changes than what we've seen in other Pon acquisitions.. Which I think is needed in this case.. Dorel and there brands don't seem to have a definite direction... It will be interesting to see how this plays out..
  • 63 0
 At least now I can say I know of someone who bought a Cannondale.
  • 6 0
 @scott-townes: That's right. After all, what could possibly go wrong...
  • 31 5
 @scott-townes: I take comfort in the knowledge that the rich deserve to be rich, the poor deserve to be poor, and that whatever happens as a result of market forces is always the best possible outcome.
  • 3 13
flag pinkbike1000 (Oct 11, 2021 at 15:59) (Below Threshold)
 Pinkbike commenters have the worst humor
  • 5 1
 @scott-townes: I guess in line with your comment, I own a Nissan and a Giant. I couldn't afford to own a Bentley and a Yeti. I agree with you in part - over concentration of a market share into one business can lead to a lot of bad things, but it's not 100% bad.
  • 2 0

Can’t afford post-COVID prices, so I’m in!!!
  • 3 11
flag pinkbike1000 (Oct 11, 2021 at 16:42) (Below Threshold)
  • 47 0
 They're going to be a hub for all bicycles.....

  • 9 3
 @TEAM-ROBOT: You forgot that the healthy shouldn't have to pay for the sick because they have been living the "right way".
  • 4 0
 @William42: What makes you think Santa Cruz employees are happy?
  • 1 0
 @William42: They probably meant more in the "small guys toppling the big guy by sticking to a plan" sense because as you said the situation has nothing to do with GME otherwise.

The problem with that is that enthusiasts that feel concerned represent frak all when it comes to bike sales and the potential gain isn't enough to create FOMO.
  • 2 0
 @scott-townes: ...Bobby Axelrod now owns Specialized. Greed is good.
  • 4 1
 @William42: I was only using the Gamestop situation as an example of a group of people on the internet working together to affect a change in a financial sector. I don’t mean to target this company specifically but companies are only able to sell $15k bikes which only cost $500 more to make with a motor than without because people are willing to pay what they ask. If everyone decides to let the industry know bike prices are too high by not paying anything the put on them, I think that could work. I am open to hearing arguments of why that is an ignorant statement though.
  • 1 0
 @MatLax00: I can't even be sure it's not the same concerned enthusiasts who continue to (neg)prop after -/+25, inflating site engagement and driving up prices, but if I were gambling online, I'd bet it's Americans. We like 'voting' more than argumentation
  • 1 0
 @gnarlysipes: and not owned by venture capital.
  • 168 1
 Maybe they can afford Tinker now?
  • 62 1
 maybe thats why they dumped him
  • 50 5
 @bontrager1: 100% why they did. Clearing the books for a sale.
  • 10 1
 @mfoga: I wonder what this means for Martin Maes, considering the rumors he was going to Orbea
  • 45 7
 Imagine that , Where can we find 25 grand , its either tinker or the coke and hookers slush fund
  • 13 2
 @Compositepro: I know which I would rather have given the choice
  • 8 15
flag likeittacky (Oct 11, 2021 at 9:03) (Below Threshold)
 @Compositepro: Crackondale
  • 91 13
 Not one use of the word "customer" in all this. This doesn't bode well for Dorel or Pon. Their focus is wrong for long term success.

"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."
  • 118 0
 Press release was probably written for the business world, not for cycling punters.
  • 52 5
 Precisely; similar to the podcast with the Outside CEO, all this vulture-capital verbage is hollow for everyone but investors. It is debatable whether these transactions produce any benefit to the consumer but they certainly contain plenty of jargon that skims profits towards the small investor group.

All this jivey lingo persists in startup culture that is little more than branding pursuit and a get-bought-out, get-rich-quick scheme.

This juxtaposes nicely to the Trek sustainability study at least *attempting to appear as though they care about things in addition to profits.
  • 40 0
 @silvbullit: I wouldn’t describe Pon as vulture capitalist. They have a portfolio of bike companies they are adding to for what looks like a long-term hold, and none were distressed. I think we all worried about that when Pon acquired Santa Cruz, but that hasn’t been a transitory move. Not that I love VC firms or believe that they will “unlock value”, but I don’t think this is about a quick exit for them. My guess is it will look like business as usual for Cannondale et al and we’ll shortly forget they belong to the Pon portfolio.
  • 24 0
 Right or wrong, that’s what they teach you in business finance 101–the goal of a company is to create value for its shareholders. I personally believe you should do that by creating value and unbelievably good products for your customers, but some just want to create oligopolies. They’ve done it in the eyeglasses world for years now. Two huge companies make all the frames and buy any new entrants to the market.
  • 14 5
 Corporate charters have one directive: Maximize profits for shareholders and keeping shareholders happy. Expecting them to act social responsible, customer centric, or compassionate is a mistake (unless it aligns with profits in a short term timeframe). Makes you wonder how our country could consider corporations as "people"?
  • 8 0
 @ppp9911: Isnt PON privately held?
  • 14 0
 @Hayek: Yeah, people are misusing the term vulture capitalist. That's when they go in and buy struggling companies and either liquidate the brand or flip them, extracting what they can. Eating the corpse, like vultures.
This is just unencumbered capitalism and stock market gaming.
  • 13 2
 @ppp9911: If not "customer centric" how does a company succeed long term? Products are bought not sold. Any company that loses sight of their customers is doomed to fail. Value comes from the transactions with customers.
  • 21 0
 @UtahBrent: that’s a surprisingly rare perspective among micro-economists who study this topic, but I agree and wrote my dissertation on that topic. There’s an idea that products become imbued with value through the supply chain process (probably a relic of Smithian or Marxist economics) and have some intrinsic value, but there is no value generated until the point of transaction, meaning that consumers give products their value as long as their utility exceeds the price of the product. It’s essential to do all a firm can to generate utility for the consumer and it’s clear that as consumers, we care not only about the functionality of product we buy, but also the firm who sells it to us. VC firms feel disingenuous to us (Dorel or Pon companies), litigious action feels off (Specialized), etc. and customers will ultimately penalize behavior that violates their expectations. Next time Specialized is considering litigating their trademark portfolio, dont, and donate the legal costs to trail building. Trademarks aren’t focused on the consumer — they care that you make good bikes and care about the sport.
  • 4 3
 @Hayek: I was speaking more to the over-arching scheme of certain aspects of capitalism these days and less to this specific transaction, that's why I included the Outside
CEO conversation into the mix. However, it definitely sounded like I was calling them vulture capitalists so I didn't communicate it very well. But, to a certain extent, they are still going to trim brands/items/features/services that aren't profitable enough. That might be reducing backstock of warranty replacement items, for example. In many cases those are the very items that bring added value to the customer. They will happily gobble up and dispose of those morsels. My point is that when investors are served, it is not serving you and I, or my parent's retirement investments, or even the few extremely wealthy people I know. It is benefitting this very small class of investors that have each other in their collective rolodex. 'Business Finance 101,' then, is now a corrosive feature of capitalism unless implemented with some semblance of ethics or service beyond profit.

All that said, Santa Cruz seems to do fine these days and has been great with warranty for myself and people I know.
  • 5 1
 that line, there is no value generated until the point of transaction, declaring it like that sounds like some kind of finding, but it’s really just a presumption of whatever ideological frame your scholarship is working within, right? You define the person paying as the sort of decider of value, and then value is what they decide. So of course it follows value isn’t intrinsic. But the only reason anyone uses the word value or spends the precious minutes of their life discussing value, is because of the connotation with intrinsic value. Otherwise it’s trivial. Lots of really smart workers in STEM make this mistake all of the time. We propose a model. The model generates hypotheses. The model isn’t a new fact and it isn’t evidence of anything. People are like, look how well it fits the observations I used to help make it, it must be pretty good! It’s circular reasoning. Thanks for the really interesting post
  • 6 3
 @UtahBrent "Not one use of the word "customer" in all this. This doesn't bode well for Dorel or Pon. Their focus is wrong for long term success."

Dorel and Pon are investment conglomerates that don't care about you as a customer because you aren't their customer, their customer is the shareholder. This is the letter their customers want to see.

These guys own a ton of companies in pretty much any industry involving mobilizing people; Audi, VW, Bugatti, Bentley, Lamborghini, MAN, Porsche, SKODA, SEAT, W&O, VBH, RH Marine, Santa Cruz, Focus, Cervelo, Union, Urban Arrow.... This is just them adding to their bike portfolio; just like all those other brands carried along being those brands when Pon bought them, so too will GT and Cannondale. This is really a non-story for people who actually ride the bikes.
  • 8 0
 @Hayek: I'm surprised by how many people are confusing conglomerates, VC's, and PE firms. VC and PE is similar but most of the time when it comes to there articles we are talking about PE (growth equity and buyout firms). These are the big fund managers that buy already established business. Some are worse and more predatory than others, but all are not likely in it for the long haul just due to the nature of the business. The goal is to increase value and cash out. Venture capital deal with funding new companies. VC's don't buy already established companies so mentioning them in deals like this usually doesn't make sense.

Then there are companies like Dorel and Pon. These are neither PE or VC's. They are conglomerates that are either private or public, but either way they are not actively taking in investor money like VC's or PE firms are, so they operate in a much different way.
  • 8 3
 @UtahBrent: Apparently you haven't heard of Comcast, AT&T, Verizon, any airline, any of the suppliers of electricity to municipalities, Wells Fargo, Bank of America, McDonald's......

Once you get big enough and you become the customers' one of a couple, or the only choice, customer-orientated models no longer matter and you normally run into these places committing actual crimes against their own customers for profit. This is why being overly friendly to businesses is extremely stupid. It always happens.
  • 7 2
 @ppp9911: Yes, traditionally you're correct. B Corps (an entity having a purpose other than pure profit seeking) are a real thing now, and the more people know about them and direct their business toward them, the more corporations will realize they need to do something more than generate profits.

I'm a huge fan of B Corps... and you all should be too.

  • 1 0
 @scott-townes: Well stated.
  • 7 1
 @Hayek: SC has become even worse. It charges even more for its mass produced products with all the economies of scale a big group offers and yet still pretends it’s a boutique brand
  • 5 3
 @jaytdubs: B Corps is just marketing bs to make money and to make customers think they care about more than just profit.
  • 2 1
 Hey, speaking of big buyouts and customer satisfaction, is it me, or have all the Outside+ banners been removed from peoples’ names and profiles? It could be they’ve all been voted down into oblivion. Or maybe Pinkbike saw it wasn’t working out too well?
  • 1 0
 I have no idea about the nuances of corporate speak. I rarely encounter it at work, or home, and likely avoid it actively.

That said , when I do hear or read it, my bullshit antenna shoots up, and I can’t help thinking ‘who’s this a*shole?’
  • 2 0
 The Outside+ purchase of PB press release on their website had the same language...
  • 81 27
 Just for the record Schwinn, gt, cannondale, mongoose have all been bought and sold so many times they have no DNA they are simply a name of some shit bike you don’t want anyway. Learn it, know it, live it.
  • 82 11
 Mmmm I dunno, man. Cannondale and GT make some decent rigs.
  • 13 1
 @extratalldirtrider: but both were at one point The Made in USA holdouts. GT made frames in California till 97, Cannondale until what, 2005?
  • 9 2
 Used to 15 years ago @extratalldirtrider:
  • 61 16
 Oh no. My bike HAS to have DNA or else I cant ride it!!! What a silly take. Its a fuckin bike, not a kid. You buy it, ride it for however long it brings you joy, sell it and buy another.
  • 3 0
 @PHeller: 2009/2010 ish was the last US built frames.
  • 5 0
 @extratalldirtrider: I love my '19 GT Sensor!
  • 18 0
 Just because the people who own a holding company buy/sell the organization doesn't necessarily mean the people who work in the operating companies don't work hard to deliver a good product.
  • 5 3
 @PHeller: I don’t care if the frames were or are made in the USA or the Far East. It makes no difference to me
  • 4 1
 @PHeller: there is no large bike company that manufactures in the US except for high end bikes. sometimes USA made is worse quality too. not always but sometimes
  • 2 0
 @TylerG96: Guerrilla Gravity is a good start. Save a few more pennies and get a Made in USA frame. They don’t need to be made by a large company. Small US based manufacturing will always be small if we’re always in search of everything needing to be cheap. Some stuff I’m perfectly fine being cheap and conglomerate owned, made overseas, other stuff I want to keep awhile so I go more local or US manufactured.
  • 57 3
 Schwinnta Cruzindale
  • 31 3
 Coming soon to a Walmart near you.
  • 5 0
 @noapathy: Nah. They will all eventually end up in the world's ultimate bike shop - Amazon.
  • 3 1
 @jollyXroger: That's their other product line called the HEYPOWERSUPERDO RIDECYCLE XTREME X (all caps required).
  • 3 0
 That's actually my stripper name.
  • 53 2
 Never been a better time to support your local bike manufacturer.
  • 24 4
 GG whoop whoop
  • 21 0
 Especially with China pressuring Taiwan currently. Better buy parts now…a Chinese invasion of Taiwan probably isn’t going to speed up production of anything.
  • 9 0
 @mountainyj: you watch that cruise missile factory ramp up
  • 2 0
 Allied Cycle Works. American-made carbon. #MadeHere.
  • 4 0
 been loving the Reeb stuff recently too.
  • 1 1
 What’s one of them? There is no such thing in reality
  • 1 0
 @CM999: Alchemy Bikes comes to mind; they build them in Colorado.
  • 2 0
 @zedpm: they are barely doing it in the US anymore I think. Pretty sure their full squish is now a full asian affair.
  • 7 0
 @mountainyj: I too will struggle to buy parts during WW3.
  • 4 0
 @adrennan, since both PON and I are Dutch, that just became a lot easier for me. Their head office is a km from my mom's place.

PON has actually been more about cars than about bicycles since the 1930s, but they seem to be going more and more back in the bike direction so I think it's a good thing. They seem to give the companies they buy a lot of freedom and do not squeeze them to death. Not that they are always the nice ones. They were implicated in a corruption case a while back, though nothing was proven.
  • 2 0
 @zedpm: They only make the front triangle in the USA, the rest is Asia.
  • 1 1
 Reeb, Lenz, numerous custom builders, I think Foes may still be American made. Thing is, people are idiots and will find stupid reasons to not buy bikes Made In USA. Guerrilla Gravity gets a lot of hate for its name choices buts their wait times are less than some of the major brands right now. People don’t put small builders first because they want to ride the hip bike of the month, not a locally built bike they’ll keep for years.
  • 2 0
 @PHeller: Brent Foes is still crushing away. Even keeps his social media pretty up to date.
Good, more bikes for loyal customers who have respect for locally made products and the people behind them. Let the people who hate wait for another year so they can get their 2022 Epic S-Works Kenevo Yet-E Session $16k model in 2024….people are gonna be real sad around Christmas this year.
Maybe, just maybe, this will teach people about being wasteful consumers who burn through garbage product like candy because, “they can just Prime another one.”
  • 45 5
 Fucking conglomerates man
  • 13 0
 Thats fine. We have WeAreOne to buy from now.
  • 10 0
 @Jvisscher: *for now
  • 4 0
 My sister works for a different outdoor conglomerate. I always tried to seed the idea to buy a couple bike brands so I could get a discount. Sadly they seem to have missed that deal.
  • 11 0
 "Capitalism is the best thing! It leads to innovations!

Nope, it leads to a monopoly or an oligopoly with collusion, which is the same thing in the end.
  • 2 1
 @MatLax00 Free market theory states that all mature markets eventually evolve into a 2-3 player industry in order to maximize scale and value to their customers. As products commoditize differentiation becomes moot and value becomes more highly prized. There's always room around the edges, but this is the law of free market economics. Appliances, electronics, aerospace and many other industries have gone through this cycle.

I can't imagine what bikes would cost if we didn't have large scale players available to produce for smaller brands.
  • 3 0
 @pourquois-pas: Just looking at Canadian telecom it's very clear that in the end value for the customer truly is the goal... Right?

By the way, pourquoi is never written with an s Razz
  • 1 0
 @MatLax00: Yeah, the value angle isn't always present. Cdn telecom is highly regulated and also has an expensive and complicated infrastructure component unique to utilities which imposes a massive barrier to entry. Not a great comparison. I'd bet a good portion of our monthly bills go to lawyers to lobby the CRTC to allow us to continue being screwed! Smile $100 microwaves is a better example, considering they cost a month's pay when they first launched.

OMG, an internet handle that isn't grammatically correct? Call the language police! hahaha Or maybe call gmail as the proper spelling wasn't available when I created a burner account for social media BS.
  • 1 0
 @pourquois-pas: I think telecom is a very good example to prove the contrary because we've got two provinces that show what happens when there's another big player to disrupt the market. In both Saskatchewan and Quebec the price is lower, showing that reaching the end of market evolution under capitalism (2 or 3 players in industry as you said) doesn't work in favour of the customers.

Even for appliances, in the end it's a race for cheaper prices that doesn't work in favour of the customers as they're sold cheaper and cheaper appliances no matter the price they pay (gotta maximize profit by just changing the design but not the parts inside, you know?)

If it lead to having the same product sold at a lower profit then I would agree with you, but that's not what we see, profit margins increase, products are made by what is basically slave labour using cheaper and cheaper materials, we're filling landfills with stuff made in China that doesn't last a quarter of the time the same item built in the 60s lasted... Except for cars, their value has increased through the years as they last much longer than cars back then, but it's a highly competitive market with a lot of players.
  • 1 0
 The auto industry is in fact very concentrated, especially when JVs are factored in.

I think you should also consider that whilst people talk about many of the issues you raised they clearly do not place much value on them, as consumers prove over and over again that price is the driver of value in most of their purchase decisions when it comes to commoditized products (especially environmental, a small portion of the market actually purchases in line with their "beliefs", and an even smaller portion is actually affluent enough to afford to consider the environment when making a purchase). Companies then spend inordinate sums trying to influence customers to consider other factors, to value things other than price, but in most mature categories the majority of volume is attributed to the lowest priced items (even bikes, far more dept store bikes are sold vs the ones we all ride).

There are always exceptions, and no economic theory plays out perfectly in the real world. And there are also a huge amount of factors that play into how a concentrated industry will behave. Consider telecom has a relatively low price elasticity as it is seen as essential. Consumer psychographics, trends, market regulations, etc.

Perhaps I should have stated Stakeholder value over Customer value (remember in most businesses the customer is not actually the consumer).

As for your telecom example, in metropolitan Ontario you can choose from nearly 20 different providers that run on one of the networks provided by the big corporations. They modestly undercut and are still relatively expensive vs the rest of the world because the rates they are charged are controlled by government regs, not the market.

Anyway, we're getting nowhere. I think we're agreeing, just taking different angles to look at the topic. I simply responded the first time because your statement was oversimplified... when innovation begins to stagnate and products commoditize in the eyes of customers the industry naturally consolidates, according to economic theory.

  • 27 0
 Ratboy back to Syndicate!?
  • 11 0
 not quite, just on CannonCruz
  • 24 1
 Pon is pretty good about letting their brands operate on their own. Some times companies buy other companies and start screwing around... example Vista when they bought Bell/Giro... some do not. My feeling is that Pon will continue to let these brands be unique and continue doing what they're doing. For the most part.

What this does and I honestly can't believe PB hasn't gone into it in this article is allows Pon to funnel more brands through one of their other recent purchases. Mike's Bikes. So MIke's can be expanded both online and in brick and mortar situations.

It also improves... if done correctly... their functionality globally. Each of these companies is stronger in certain areas. Now they can combine assets, sales teams, distribution centers, etc. This should in theory help each brand grow a bit stronger or at the very least increase profit margin by combining footprints.
  • 5 1
 Agreed, PON has more value at the very top for the cycling world. Dorel builds cheap furniture and owns a million side things.
  • 2 0
 Infusing Schwinn quality and Santa Cruz/Cervélo quality would be disastrous for Pon and I'm sure they know this. With all these major brands and Mike's Bikes (Which includes BikeSmart, and Public Bikes), Pon seems to be making a major reach into the U.S. bike market, and for many, hopes are up!
  • 27 3
 Hopefully this will resurrect the zombie that is GT, and help Cannondale stop being such a mediocre brand.
  • 8 5
 Maybe they could book 25K USD/year for Tinker?
  • 2 0
 @zoobab2: Don't see why not, looks have Pon have plenty of money to throw around!
  • 5 0
 They make all the bikes they need to make to be involved in our sport. What else is there? I’d argue that the problem is that these brands don’t represent anything more than that - a brand. A bunch of marketers and maybe an engineer/designer or three for product development but no real “prescience”. Very little demo tours. Not many sponsored events. No local manufacturing. An office in an office park somewhere.
  • 20 2
 I really don't understand this industry. People are making a shit ton of money off of it... How do we get a little more in the pockets of those who actually work in it?
  • 3 3
 get them a job at amazon?
  • 2 0
 I’m just saying, the general consensus seems fine with supporting D2C and amazon to save a buck.
  • 19 1
 Headline next week: Pon Holdings buys Outside in 1 million dollar deal after all Pinkbike commentors ditch the site.
  • 7 0
  • 3 0
 @inside-plus: Poutside Plus
  • 22 2
 It’s a pon-zi scheme.
  • 1 0
 Hahaha great pun.
  • 18 0
 Man you know how many bikes I could buy with 810 million dollars. Goddam
  • 262 0
 at least 3 sworks kenevo SLs
  • 13 3
 At least one... maybe even two if you get alloy frames
  • 2 2
 @twonsarelli: i don't know man, you might be able to buy 4? maybe?
  • 7 1
 @twonsarelli: 3 Big Grin LMFAO Big Grin this shit made my day
  • 2 1
 @twonsarelli: 3 max LOL
  • 6 0
 Could you find $810m worth in stock now though?
  • 14 1
 You could get a GX alloy frame FS, maybe, but expect delivery in April 2022.
  • 1 0
 You mean this year?
  • 2 0
 @twonsarelli: nope still saving for the "founders edition"...
  • 1 0
 @twonsarelli: this years or next years? I reckon 2 max
  • 2 0
 Aliens turn up and wonder which nutters bought 809 million in sram sx rear mechs
  • 1 0
 @twonsarelli: no only one alloy kenevo with sram sx
  • 1 0
 @twonsarelli: comment gold
  • 1 0
 @twonsarelli: That you need to use a bit, so the motor fails, so Spesh repairs it and gives you a 4 year warranty. Repaired units are worth more than new ones in the 2nd hand market... which where you could buy up to 5 with tha money!
  • 4 0
 @twonsarelli: he said bikes. Not mopeds
  • 1 0
 @twonsarelli: 53410, give or take.
  • 2 0
 @inside-plus: guess I need to replace the batteries in my abacus
  • 20 2
 They overpaid for Santa Cruz. And they were not the first...
  • 10 2
 Everyone overpays for SC. The remarkable bit is how they have managed to get away with it for so long
  • 1 1
 Great, now Santa Cruz will be even more expensive . The Conglomerate needs to reap the rewards of its risk, then continue to capitalize on the Brand's reputation.
  • 2 0
 @Glory831Guy: They've owned Santa Cruz for 6 years
  • 19 0
  • 16 0
 "But for a beautiful moment in time we created a lot of value for shareholders."
  • 13 0
 I am also confident that this transaction represents full value for Dorel shareholders
  • 11 2
 Chill. What a wonderful idea. Syphon all the money to a few deep pockets. I wish we as consumers could all collectively tell these corporations to screw off. Support small business where you can and recognize those that refuse to sell out.
  • 4 0
 Shimano anyone?
  • 8 0
 Consolidation is the way of the world, but might turn out to be an anachronism. PON's model, a portfolio of brands that largely leverages technology and production from external partners, might not age well. If the current supply chain disruption turns out to be a longer-lived part of the industry, the smart money is on companies developing local, resilient and cost-effective production technology. Guerilla Gravity comes to mind.
  • 1 0
 Except unless the entire supply chain diversifies the small players won't have buying power to get the materials they need in a supply crunch. My local outdoor shop is struggling to get products right now that are stacked in pallets on the floor at Cabelas.
  • 8 0
 Seems worth mentioning that Pon Holdings also just acquired Mike's Bikes, a Bay Area (California) store chain that was supposedly the world's biggest dealer of Specialized (emphasis on *was*, because Spesh cancelled all their orders when the deal went down).
  • 2 0
 Worth mentioning for sure
  • 10 0
 The myth: there are a lot of bike brands with diverse products

The reality: a handful of companies make all your bike crap
  • 12 2
 Cannondale, Schwinn, Mongoose & GT. Someone at Pon loves the 90's
  • 12 3
 I just took Schwinn off my short list.
  • 4 0
 No bass boat paint job for you!
  • 6 1
 Hopefully we see people make a push to support smaller independent builders since the price gap between premium bikes from the big brands and boutique brands seems to be closing.
  • 1 0
 @grub14: Not to worry! The boutique builders are catching up quickly!
  • 25 21
 Pinkbike readers be like:
What do you mean some large companies decided to do a thing? As an cyclist myself I feel entitled to a sweet bike from the subject company, but the company should have no expectation or right to make a profit. In fact, Why won’t the shareholders just agree to recategorize the company as a charity? It’s because they’re greedy!
  • 1 0
 Nor do most people understand that the vast majority of the "boutique" brands they love are structured similarly for the same reasons but on a smaller scale. 100:1 odds most of these small companies are not directly owned by the "owners" on paper but have been structured so the OpCo is part of a HoldCo so profits can be taken and redirected to other assets through the Holdco to minimize and/or defer income taxes. Majority are paying "competitive wages", which means market average, and may supply some nominal perks to make it a "great place to work".
  • 4 0
 Makes a lot of sense. Dorel was always a weird owner for these bike brands. PON seems to be a great manager of brands and maybe this will allow GT and Cannondale a little more margin room to continue to play with innovation etc. Being a little part of Dorel's master portfolio wasn't the best environment to build a consumer focused innovation brand.
  • 5 0
 Another reason to buy from small brands like Banshee or Transition, for big brands, maybe Trek as they are at least more transparent and environmentally conscious. Monopoly is never a good thing.
  • 6 0
 What a deal for Dorel. I hope the cannondale or GT DNA doesn’t disappear.
  • 5 1
 That happened years ago. Neither Cannondale nor GT have been anything more than a way for a big corporation to sell bikes for over a decade.
  • 3 0
 @wyorider: The 'GT' most of us grew up with and respected died not long after Rich Long passed away. Gary knew it, cashed out.
  • 6 0
 I see this as potentially a very good thing for smaller companies depending on how they're able to position themselves.
  • 7 0
 Monopolize all industries! Crush the plebs.
  • 6 3
 Ask anyone that worked at Santa Cruz or Cervelo how those transitions went...... Holdings companys like PON exist for one reason... PROFIT Therefore expect quality to go down, selection to diminish, more big box sales and a bunch of white privileged middle aged dutch males to have fat bank accounts.
  • 2 0
 There are other ways to increase profit. Supply chain efficiencies most notably. I'm not sure that PON is a terrible PE company.
  • 4 1
 I’m not sure what they are really getting besides brand names. IP? Seems like vertical integration is the future with ebike drivetrain development, manufacturing and direct to consumer sales.
  • 2 0
 This is actually really interesting. They paid significantly more than the value of the entire company for the brands. Someone tried to buy out the company earlier this year for around 530 million but would have been taking on the company's debt. That's how much freaking debt Dorel has. Shareholders turned down that offer and the share price has tanked recently.
  • 1 3
 Huh, plenty of dentists but apparently not a lot of finance guys on here.
  • 2 1
 $810M, I wonder how good a value that is.
What their ROI will be, interest on any loan, restructuring, distribution cost savings, and forward plan for the companies.
Also... how many patents they have bought as part of that $810M?
  • 2 1
 So I took a look at their site:


They describe the role of the Santa Cruz brand as "Darwinism in Action". Wonder if Minaar is going to have that on his jersey next season. I hope they reconsider. I guess they are very clear in their direction and job descriptions.
  • 5 0
 So if Pon get into the wheel game ... would they make their own Pon Hub?
  • 1 0
 They now own Santa Cruz's Reserve Wheels
  • 4 1
 My thoughts go to the employees who will be mowed down by the "new vision", the "trend marketing", the "growing demand" and the management of the "family"
  • 2 0
 Im from Wilton CT originally, where the Cannondale HQ is. I went back to visit my folks this summer and drove by, the windows are all boarded up and the Cannondale sign is taken down. I wonder where they're moving to.
  • 1 0
 Learned to do bunny hops, cross ups and table tops aboard a caloi-cross BMX in 1983 in Brazil. Learned to ride singletrack on a giant iguana in 1997 in Asheville NC, Raced Enduro first time in 2010 on a GT Force in Greenville SC. It's all connected now.
  • 3 0
 I think Trek would figure out how to reduce my bike's arrival time real quick if I spent $810 million on it
  • 4 0
 So....I guess Iron Horse is staying with Dorel then?
  • 3 0
 Mmm i think that components shortage will be very critical for other than Pon, Trek, Specy
  • 4 1
 Thanks, Pon, for all the free bearings I get from the Santa Cruz free bearings for life program!
  • 4 0
 Bring back the Schwinn Straight 8!
  • 1 0
 Where do these corporations come from that out of nowhere gobble up major brands, better yet where is their money coming from to be able to make such huge purchases. The M&A game is quite the enigma.
  • 1 0
 If I was this company I would focus GT on gravity and focus Cannondale on XC and Road, or maybe turn GT into an ebike brand. Some way to differentiate the brands better so I would Know why to buy a SC vs a Cdale vs a GT.
  • 3 0
 Is that a consolidation or a rise of a monopoly?
  • 3 0
 A this is why bikes are so expensive!!! Bug corpo funds.
  • 2 0
 Whew with all this scale Santa Cruz will finally be able to bring their pricing in line with Giant.
  • 3 0
 This is why I bought a Druid instead
  • 2 3
 Ask anyone at Santa Cruz or Cervelo how that transitions gone...... Holdings companies like PON and Accell have one interest, profit. Watch quality drop, choice diminish and some white privileged middle aged Dutch white guys get rich
  • 1 0
 @gnarlysipes: all SC bikes already look the same
  • 1 1
 Hey I have a Cannondale. Moterra 1 to be precise. Have had it 12 months and its one on the best built bikes I have ever owned. I don't quite understand the negative press or why you see so few reviews
  • 3 0
 Pon also bought Mike's Bike's, in CA. So they can do DTC & local shop.
  • 2 0
 And dropping tinker was the deal clincher! That guy working for us for ever he ant 25 k he gets the door
  • 3 0
 Oh well, it's not like Cannondale could get any worse anyway
  • 2 0
 Pon clearly has some money burnig a hle in their pocket. First SC then Mikes Bikes and now this?!?! wow
  • 1 0
 Gotta love those who criticize organizations who seek monopoly, are greed and who seek to control everyone and everything … then vote anti-Brexit .
Sellouts !
  • 6 4
 So Wyn Masters to Syndicate? Big Grin
  • 2 0
 810 million $ in bikes??!! I'm gonna tell my wife.....
  • 2 0
 Can’t wait to see a Santa Cruz and schwinn concept store
  • 1 0
 this industry is ripe for m&a as long as it keeps offshoring the supply chain
  • 1 0
 What a surprise that the whole bike industry has shortages… literally one big company…
  • 5 3
 I wont buy those brands anymore .... its been fun ....
  • 2 0
 Why? PON is just as worthy if not more than the Dorel owners. Look into their company, furniture and all kinds of side gigs.
  • 2 1
 We're all just pons in the capitalist scheme. Buy everything you can locally and using the barter system whenever possible.
  • 2 0
 Could explain Tinker getting fired.
  • 1 0
 Awesome to see a company headquartered in the bike capital of the world succeeding. Not surprising at all.
  • 1 0
 Proud owner of a Foxy Carbon R, far from being perfect but a character of its own
  • 3 1
 They're about to be hit with a massive anti-trust lawsuit.
  • 3 3
 This is great! Now Cannondale might be able to afford to pay that guy who was complaining on Instagram. I honestly can't remember who he was though
  • 2 0
 That's why I am happy to ride a Revel. No corporate overlord.
  • 1 3
 The greenhouse impact of a bike I'm buying has zero impact on my purchasing decision. This is nonsensical corporate virtue signaling for the citizens of Wokadishu to pat each other on the back over as they buy alloy bikes because there's supply shortage of carbon bikes.
  • 2 0
 Can't wait for the Lefty Mullet Bronson
  • 1 0
 Everyone loves criticizing the buyers …
Why aren’t we talking about the “Sellouts”…
  • 1 0
 Surprised they paid that much.. This is actually a good thing for smaller brands.. opportunity to gain market share
  • 1 0
 Surprised they paid that much.. ouch. Actually a good thing for smaller brands.. opportunity to gain market share
  • 1 0
 Hope they do something with Schwinn other than supermarket garbage. Loved the Straight 8, 6 and Rocket 88.
  • 13 15
 It might be good for GT and Canndonale to get some fresh blood in their MTB industrial design teams, is it a co-incidence that both have a tendency to look awkward and ill-proportioned?
  • 17 0
 Wouldn't normally disagree, but I think that recent model GT pictured above looks great.
  • 10 0
 @honourablegeorge: GT definitely stepped up their game recently.
  • 2 3
 @honourablegeorge: It's a big improvement but the seat tube still looks massive (dunno if it is or not) and it's a bit too reminicscent of the previous-gen Nukeproof Mega to my eyes.
I'm not into curvy bikes at all though.
  • 1 0
 Does that mean Tinker is back in?
  • 1 0
 No 10 percent staff discounts on Santa Cruz bikes, just sayin.
  • 1 0
 Buy/Ride/Own Specialized, YT or Trek and be calm
  • 2 1
 I wonder if Tinker was aware of all this ?
  • 2 0
  • 1 1
 They bought Caloi to pay l a lot less taxes here in Brazil Since bicycles have an enormous amount of taxes
  • 1 0
 Kyary Pamyu Pamyu - Ponponpon. Youtube it.
  • 1 0
 Make Eddie Fiola GT Again!!!
  • 1 0
 I hope they change every direction of CALOI
  • 1 0
 So Bryceland is « reunited » with Santa Cruz in some weird way. Ha
  • 2 1
 Bicycle dicision.
  • 6 7
 Add more brands to the list I will never support. For profit, only for the shareholders
  • 1 2
 The Dutch have bin smoking again small country but ohoh so good in taking over things.
  • 5 0
 Most major Dutch corporations have themselves been taken over, moved or sold off. Hoogovens (Tata Steel), Unilever (moved to the UK), KLM (practically taken over by Air France), Philips (many divisions sold off to several competitors), etc.
  • 2 0
 @Mac1987: You still have ASML
  • 2 0
 Dutchies on their way back to Global Bike World Domination! Oh, and now I can finally order a Lefty on my Gazelle opoefiets.
  • 1 1
 If there are big Dutch companies it is because it is convenient to be based there Smile
  • 3 0
 @blacktea: that's usually the foreign companies that moved here for tax benefits and/or infrastructure and accessibility. There are companies here that started here and that became successful because of innovations and entrepreneurship (like Philips and ASML).
  • 5 4
 Santa cruz got Outsided.
  • 1 1
 No Pon intended but that is a dumb name whatever business your in.
  • 2 0
 Pass the Dutchie Pon the bike brands side
  • 4 3
 Buy Guerilla Gravity...
  • 3 2
  • 2 1
 who downvoted this WTF
  • 1 1
 Maybe they can now give Tink 25K
  • 1 0
  • 10 12
 Conglomerates stink - I’ll definitely avoid buying anyone of these brands going forward.
  • 20 0
 Going forward? All the brands involved here were part of a conglomerate already - only which one changed for some of them.
  • 6 5
 I haven’t bought Santa Cruz since Gen1 Hightower don’t plan to buy another one of there bikes after Pon bought them@FuzzyL:
  • 6 6
 I smell monopoly…..
  • 3 4
 Atleast somebody will buy a GT..
  • 1 2
 At least China can't illegaly dump cheap bikes lile they did with solar
  • 1 2
 Big Dave
  • 1 2
  • 2 4
 Ratboy back on a Santa Cruz now?
  • 1 0
 Why, when they have the same owners as Cannondale?
  • 5 6
 Greedy bastards
  • 3 6
 Pon 's I have a problem with this scheme.

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