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
Current Pon.Bike brands
- Santa Cruz
- Urban Arrow
- BBB Cycling
- Lease a Bike,
- Reserve Wheels
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.
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.
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