The parent company of cycling brand Raleigh snapped up by US private equity firm KKR in €1.56bn

Jan 24, 2022 | News

The Dutch firm that owns Raleigh, one of the world’s oldest cycling brands, will be sold to a consortium of investors led by US private equity firm KKR as a worldwide bike boom continues.

The deal values bicycle firm Accell Group at €1.56bn (£1.31bn), or €58 per share, representing a premium of 26 per cent of the company’s share price at market close on Friday.

On Monday, news of the deal sparked a surge in Accell’s share price, reaching €57.30 by midday, an increase of 24.4%.

Aside from Raleigh, the group’s other well-known brands include Haibike, Ghost, Koga, Sparta and Batavus.

“The consortium is committed to further developing the Netherlands as the global capital of cycling by building on the company’s leading position in the European e-bike market and continuing to grow its strong heritage brands,” KKR partner Daan Knottenbelt added.

The deal marks the latest sign of rising investor interest in the e-bike industry, after Dutch bike firm Van Moof raised $128m (£95m) from Hillhouse Capital last year to fund its US expansion, and Cerberus Capital Management made an unsuccessful bid for Canada’s Dorel Industries.

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Founded by Richard Woodhead and Paul Angois in Nottingham in 1885, Raleigh was bought by businessman and inventor Sir Frank Bowden in 1888 before becoming incorporated in 1889.

By 1913, it was the largest bicycle manufacturing company in the world. It also produced motorbikes and three-wheeled cars, eventually leading to the formation of Reliant Motors in 1935.

Accell and the consortium said that the deal would mean the Dutch firm was better placed for long-term success, as global supply chain issues threaten to disrupt the industry just as the pandemic boosts demand for two-wheeled vehicles.

In particular, a shortage of parts such as bicycle seats and forks has led to an increase in lead times from ordering to delivery.

Accell reported a 17%  rise in sales for the 2020 financial year, representing 900,000 bicycles and reaching a total value of €1.3bn. It said growth was driven by a strong rise in sales of e-bikes as an alternative to public transport.

The firm’s chairman Rob ter Haar said that Accell’s board unanimously supports the deal as offering “compelling and immediate value for shareholders” and that it would help the company strategically as well.

Source: Inews

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