One of the first industry mass-layoffs that we wrote about was Zwift, around May. Since then, Zwift has conducted a second round of mass layoffs whilst being the main sponsor for the Tour de France Femmes and oddly still hiring for the roles that were just recently laid off. But they are not alone, many companies across the board are laying off staff. Rad Power Bikes cut 10% of their staff. Peloton, the indoor cycling trainer company, joined in the action and conducted its own restructuring. Hop on LinkedIn and there are presently countless stories of layoffs within the industry. But while companies are laying off a huge amount of staff, the opposite is simultaneously happening, companies are being acquired left and right.
A group of cyclists using Rad Power bikes.
Amidst the recent investments, NBA star LeBron James announced a 10% acquisition in Canyon Bicycles. Specalized UK acquired retailing chain Rutland Cycling. Vista Outdoor acquired Fox Racing. Sidi was acquired by an Italian investment company. Deaneasy merged with Vittoria Group. And that's just within the past month.
Let's break it down one by one, starting with LeBron James' investment in Canyon Bicycles.
Canyon Bicycles, a German manufacturer of high-end bicycles, is expanding its operations to the United States with the help of two new investors: LeBron James' LRMR Ventures and private equity firm SC Holdings.
Founded in 1985 by Roman Arnold, Canyon Bicycles produces a wide range of bikes including road, mountain, and electric models. The company has been majority-owned by Groupe Bruxelles Lambert since 2012.
With this latest round of funding, Canyon Bicycles says it is committed to growing its presence in the US market and becoming a leader in innovative bicycle design.LeBron James said of his investment: "I'm excited to partner with Canyon and help grow the brand in the US. Canyon is a company that is passionate about innovation and I'm looking forward to working with them to help take the brand to new heights."
Specialized UK has announced that it will be taking over Rutland Cycling, a chain of 12 stores located across the country. This move comes as part of Specialized's goal to give riders more opportunities to interact with the US-founded bike brand.
Simon Homer, managing director of Specialized UK, said: "Bringing Rutland into the Specialized family provides some exciting opportunities for both businesses. Immediately, we will have to make some decisions to secure a sustainable future for Rutland and this may involve a restructuring of its network and cost base."
Rutland Cycling was founded in 1981 and is known for its Giant specialist dealer stores. BGF, the London-based investment firm that currently owns Rutland, will be completely exiting the business.
Vista Outdoor has signed an agreement to acquire California-based Fox Racing. The purchase price is $540 million, with the potential for an additional $50 million based on Fox Racing’s financial performance.
Jeffrey McGuane, CEO of Fox Racing, will continue to lead the company following the closing of the acquisition, as will all of Fox Racing’s leadership team.
Chris Metz, Vista Outdoor CEO, said: “We are excited to add Fox Racing to our portfolio of iconic outdoor brands. With the acquisition of Fox Racing, we are continuing the successful implementation of our strategy to use accretive acquisitions to expand our leadership position and ability to capitalize on long-term growth opportunities in outdoor recreation.” Metz continued: “The addition of Fox Racing to our portfolio will allow us to target multiple consumer demographics across mountain and road biking, skiing/snowboarding, and powersports. Combined with enhanced access to capital for innovation and scale, we believe this transaction is a win-win for all involved."
Vista Outdoor expects to finalize the transaction in the second fiscal quarter of FY 2023, subject to the receipt of regulatory approvals and other customary closing conditions.
McGuane said: “We’re excited to join the Vista Outdoor family. Together we can leverage the heritage of our leading brands, enjoy new supply chain synergies, expand our deep and established channels and target an expanded customer base. Combined with enhanced access to capital for innovation and scale, we believe this transaction is a win-win for all involved."
Italmobiliare, an Italian investment company, has acquired Sidi Sport, Italian cycling and motorcycling footwear brand, for an investment of €66 million.
Sidi Sport was founded by Dino Signori in 1961 and had sales of almost €38 million in 2021 with earnings of around €7 million. Under the terms of the agreement, Italmobiliare will take over 100 percent of Sidi Sport. The execution of the contract is expected to take place in the fourth quarter of 2022 subject to the completion of a corporate reorganization that includes spinning off certain properties.
"With this new transaction, Italmobiliare is expanding its presence in the sports and outdoor market," said Carlo Pesenti CEO of Italmobliare. "The decision to invest in Sidi is based on the value of a winning brand that is much appreciated, the company's efficiencies and future growth potentials."
Signori commented on the sale saying, "I am proud of this that respects my history as an entrepreneur over last sixty years or more. It will ensure that the company can grow even stronger and more competitive."
Vittoria Group, a tire manufacturer, has announced that it has acquired Deaneasy, a tire insert supplier. This move will allow Vittoria to develop accessories quicker with research into sustainable materials and processes being a focus.
Deaneasy owner Alessandro Bonarotti will oversee innovation in accessories, according to Vittoria, to expand the line. The first new products from this collaboration will come to the market this year.
"We make the most advanced bicycle tires on the planet," said Stijn Vriends, president and CEO of Vittoria Group. "To complement these, we aim to offer a full range of premium accessories to give our riders the best riding experience. The integration of the air-liner business and the know-how of Alessandro Bonarotti in our group is a fundamental step in this journey."
Vittoria launched their liner in 2018, offering rim and tire protection for tubeless setups and run-flat technology. Vittoria offers the insert in all major riding disciplines: mountain, gravel, and road.
"We are very pleased that the long-term collaboration with Vittoria has resulted in such a complete product offering," Bonarotti said. "With the integration, we will become even faster in bringing super-innovative products to the market."
And so the world continues turning, amidst uncertainty caused by record-breaking layoffs, there is also a huge transfer of cash through acquisitions.