Dorel Industries has entered into a definitive agreement to sell Dorel Sports, its bicycle segment, to Pon Holdings, the Dutch cycling and mobility group. The transaction is valued at US$810 million in cash, representing approximately CAD$1 billion, payable to Dorel upon the deal closing.
The sale of Dorel Sports is expected to close before the end of the first quarter of 2022. Dorel Sports brands include Cannondale, Schwinn, GT, Mongoose, Caloi and IronHorse.
In the cycling space, Pon has a premium brand portfolio, with more than 10 bicycle brands. These include Cervélo, FOCUS, Santa Cruz, Kalkhoff and Faraday. The company is based in the Netherlands, with offices in Germany, the USA, Canada, China, Taiwan, the UK, Hong Kong and Australia.
Dorel expects to use the net proceeds from the sale of approximately US $735 million (subject to closing adjustments) to reduce indebtedness, return capital to shareholders and for general corporate purposes. The sale is not subject to any financing conditions.
The sale has been unanimously approved by Dorel’s Board of Directors and is subject to customary closing conditions, including receipt of applicable regulatory approvals and the absence of any material adverse changes with respect to Dorel Sports until closing.
Under applicable corporate law, Dorel notes that the transaction is not subject to approval by Dorel’s shareholders. The transaction will consist of the sale by Dorel of 100% of the shares of its indirect wholly owned subsidiary companies comprising Dorel Sports as well as certain related assets.
“Acting on feedback from our shareholders, Dorel embarked on a thorough review of strategic alternatives earlier this year,” said Martin Schwartz, Dorel President and CEO. “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.”
