British bicycle manufacturer Raleigh has been bought out by Dutch-based Accell Group in a deal worth $100 million (£62 million).
The deal is being completed so that Accell, a holding company which owns a number of European bicycle manufacturers, can improve its position in North America and the UK, as well as its sourcing capabilities in Asia.
Raleigh was subject to a management buy-out in 2001, led by chairman and previous chief executive Alan Finden-Crofts, after its partent company encountered difficulty and filed for bankruptcy. The vast majority of the $20 million price-tag was for existing stock.
While Raleigh’s Nottingham factories used to manufacture up to one million bikes a year, such as the Diamondback range, in the modern era its products have been built in Vietnam, Korea and Bangladesh.
Finden-Crofts comments, ‘As talks progressed with the various interested parties earlier this year, Accell Group emerged as the clear preferred buyer for the business, given the highly complementary product range and geographic presence of the two businesses.’
Accell predicts that, on the back of the deal, synergies of €2-€3 million can be realised over two years. The purchase will be financed using debt and equity financing, with support coming from Dutch bank Rabobank. As part of the deal, Finden-Crofts will remain in his role for another six months.
Rene Takens, CEO of Accell, notes, ‘Acquiring Raleigh adds a strong traditional and global brand with a rich heritage to our brand portfolio and with the Diamondback brand we strengthen our position in the mountain bike and BMX segment.’
Takens says the transaction also improves its position in the bicycle parts and accessories sector in North America and the UK. The company reported revenues of €577 million in 2010.