SRAM and Lehman Brothers Merchant Banking (LBMB) have completed their transaction, giving LBMB a 40% stake in SRAM through a strategic investment for a reported US$200 million (€146 million). The deal comes after turmoil on the financial markets and the collapse of parent company Lehman Brothers.
In a further twist, prior to the completion of the LBMB transaction, seven-time Tour de France winner Lance Armstrong confirmed his return to the sport of bike racing with the SRAM-supported Team Astana. Additionally, Armstrong has made a ‘meaningful passive investment’ alongside LBMB to further strengthen his ties with SRAM.
"Getting to the finish line, given the current state of the financial markets, is a reflection of LBMB’s role as one of the leading private equity organisations in the middle market and our strong SRAM management team," said Stan Day, SRAM Chief Executive.
"All of us at LBMB are thrilled to be closing our investment in SRAM. The company is a leader in its industry with tremendous momentum and a bright future. We look forward to working with SRAM’s management team to build the business and realise its full potential in the years to come," said Charlie Moore, LBMB Managing Director.
According to both companies, the transaction brings a number of opportunities for SRAM and the cycling industry, including: SRAM adds LBMB as capable strategic financial partner to its shareholder base. The SRAM Cycling Advocacy Fund has been established with US$10 million (€7.3 million). These funds will be used over the next five years to support efforts to improve cycling infrastructure. This process has cast the cycling industry in a positive light and introduced it to a number of capital providers.
As a result of the transaction, Charlie Moore and Bill Lovejoy, also a Managing Director at LBMB, will join the SRAM Board of Directors. The SRAM management team remains intact.
Armstrong’s use of SRAM components will become a part of the SRAM overall marketing programme. He will also serve as a technical advisor for SRAM’s product development teams alongside many of SRAM’s other established professional riders. Stan Day said "The entire organisation welcomes Lance to the SRAM team. We are looking forward to his input and doing everything we can to support his return to racing."
