Press Release

Santa Cruz, Cannondale, Schwinn, Mongoose, GT, Cervélo and More Will All Be Owned by Pon Holdings 31

Bill Lumbergh-approved.

sspomer
10/11/2021 7:16am
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Pon Holdings to acquire Dorel Sports, creating a world-leading bike company

  • Combination Dorel Sports and Pon.Bike creates a leading bike company in the world with around 2.5 billion euro in revenues
  • Acquisition fully fits Pon Holdings strategy to build a complete portfolio of premium and electric bike brands covering all categories
  • 15 top brands, including Cannondale, Schwinn, Caloi, Gazelle, Swapfiets, Kalkhoff, Cervélo, Santa Cruz
  • Canadian Dorel Industries and Pon Holdings agreed on acquisition; sale expected to close before the end of the first quarter of 2022

Amsterdam, 11 October 2021 – Pon Holdings, headquartered in Amsterdam, the Netherlands acquires US-based bike company Dorel Sports. By combining Pon.Bike and Dorel Sports, a leading bicycle company in the world will be created, with a combined revenue of around 2.5 billion euro. Pon Holdings and Dorel Industries Inc., the parent company of Dorel Sports, today announced the acquisition.

The combination of Pon.Bike and Dorel Sports creates a bicycle company with the strongest portfolio of iconic and quality brands. Dorel Sports (1.2 billion US dollar revenue) owns the worldwide renowned brand Cannondale, with a complete range of premium bike models for all types of riders, including a strong e-portfolio. The American Original brand Schwinn is the number 1 in awareness in the United States, with a heritage of 125 years. The same rich history applies to Caloi, market leader in Brazil providing a leading position in Latin and South America. Mongoose and GT are both from California and are icons in the Dirt and BMX community.

For over ten years, Pon Holdings has been building a worldwide portfolio of leading bicycle brands. It started with the acquisition of the Netherlands based Gazelle in 2012, currently one of Europe’s most well-known brands. Later on, Kalkhoff and Focus in Germany, Cervélo and Santa Cruz in the US, as well as the Dutch Urban Arrow and BBB Cycling were added to Pon.Bike. Leading to a top 5 position in the worldwide market and revenues of 1.5 billion euro. Pon.Bike leads in e-bike sales and introduces new concepts for renting, leasing and retail in the European bicycle market with brands such as Swapfiets and Lease a Bike. The role of the independent bicycle dealer for sales and service of premium brands remains important.

US break-through

With the acquisition of Dorel Sports, Pon.Bike not only reaches a worldwide leading position, it also further improves its broad portfolio of bicycle brands. Moreover it means a break-through in the United States, with millions of consumers and a rich offer of bikes in all categories (Urban, Trekking, MTB, Road).

Janus Smalbraak, CEO of Pon Holdings says: “Today’s step is a milestone in the creation of a world-leading bike company with a variety of quality brands. With the acquisition of Gazelle in 2012 we launched a strategy that step by step led us to the 1.5 billion in revenue bike group that we are today, with great comfort and performance bicycle brands, of which 70 percent electric. As a result of this strategy. We have now reached a highlight with the acquisition of Dorel Sports. They have a rich history with their iconic bike brands all with an impressive heritage. Schwinn is an institute in the US. Caloi the pride of Brazil. And Cannondale is a truly global brand with an excellent reputation. Dorel Sports really is complementary to Pon.Bike and that’s why this is such a logical step. Together we can further cater the ever growing demand for quality and electric bikes, whether it’s for urban use, leisure or sports. Biking is not only healthy, it also plays a critical role in fighting inner-city congestion. It’s one of the most sustainable ways of transport. We are determined to make bikes a powerful part of mobility.

We look forward to working together with the Dorel Sports people all over the world and welcome them to the Pon family.”

Growing need for e-bikes

Given the growing need for electric bikes in all main categories, Pon Holdings strongly believes there is room and potential for a true leader in the world with a complete family of iconic and quality bike brands for daily use, for business, in leisure and in sports. The acquisition of Dorel Sports is fully in line with this vision. All brands can benefit from innovation, design, knowledge and creativity throughout the Pon.Bike group. Brands of Dorel Sports, for instance, can leverage the experience of Pon.Bike with electric bikes, combined with the high growth potential in the US. At the same time, the eCommerce experience of Dorel Sports will greatly benefit the European markets of Pon.Bike. Already 20% of Dorel Sports revenues is generated online.

This rich knowledge and innovation contributes to all bike lovers in the world, especially in a time when cycling, dealers and bicycle companies can provide tangible solutions for mobility, health and sustainability challenges consumers, governments and companies face.

Transaction

Pon Holdings acquires Dorel Sports for a total consideration of US$ 810 million, on a debt and cash free basis. The transaction has been recommended unanimously by the Boards of both companies. The transaction is subject to customary regulatory approvals and expected to be closed before the end of the first quarter of 2022. Lazard and ING acted as financial advisors and Goodmans as legal advisor.

The family of bike brands

Pon.Bike, as well as Dorel Sports hold a broad range of bicycle brands. Both portfolios consist of:

Dorel Sports:

Cannondale, Schwinn, Mongoose, GT, Charge, Caloi, KidTrax

Pon.Bike:

Gazelle, Kalkhoff, Focus, Santa Cruz, Cervélo, Swapfiets, Urban Arrow, BBB Cycling, Lease a Bike, Union, Reserve Wheels, Juliana

About Pon Holdings and Pon.Bike

Pon Holdings, one of the Netherlands largest family companies, is a leading international company and mobility group with 14,000 employees and around 7.5 billion euro revenue. Pon Holdings operates in a variety of markets, ranging from consumer and company cars, bikes to infrastructure & construction machines, generators and marine solutions, as well as in the agricultural sector. The company is active in 40 countries with 80 different companies in five business segments: Automotive, Pon.Bike, Equipment & Power Systems, Industrial Mobility and Agriculture Services & Products. In The Netherlands Pon is the largest mobility group, facilitating daily transport for millions of consumers with bikes, cars and new mobility services.

Pon.Bike has around 2,400 employees and € 1.5 billion euro. 70% of sales is e-bikes. Pon.Bike operates in Europe, North America, Asia and Australia with leading brands. In August 2021 Pon.Bike acquired Mike’s Bikes, with 270 employees and 12 locations in the US. Mike’s Bikes is a strong online player with its own brand Public.

About Dorel Sports

Dorel Sports, which generates 1.2 billion dollars revenue with leading bike brands, has its HQ in Wilton, Connecticut (US), as well as several plants and distribution centers. In Europe Dorel Sports has locations in the UK, Germany and the Netherlands, the latter with its European HQ. Dorel Sports also produces in Almelo, the Netherlands. Furthermore the company is located in Sao Paulo and Manaus (Brazil), Japan and Taiwan. Dorel Sports is a division of Dorel Industries Inc, listed at the Montreal stock exchange.

Note: reference is made to the press release as distributed by Dorel Industries Inc on 11 October 2021, which is leading in case of differences in text.

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31 comments

View replies to: Santa Cruz, Cannondale, Schwinn, Mongoose, GT, Cervélo and More Will All Be Owned by Pon Holdings

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Trail_thug
3 years ago
"Growing need for ebikes" more like sell a bike to people that wouldn't pedal to clog the overwhelmed trail systems around the country. I'm all for inclusion but we don't need a family of 4 cycling up a dh trail or advanced trail systems
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FLFlatLander
3 years ago
AMEN! More and more the folks in over their heads are coalpowered. Fossile fueled (and often some booze to boot!)
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ssk
3 years ago
It's just math, if you sell the same number of a product at the same margin, but the base cost is higher you bring in more cash per unit.

Why do you think big chain stores jumped on the CFL and LED light bulb product so fast a few years back?
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darren.mallard.5
3 years ago
Santa Cruz has been a part of PON for years. I would love some insight to the influence they actually have after acquiring a brand.
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MatadorCE
3 years ago
I bet a lot people on this site won't get the reference since this movie is the same age/older than them LOL
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FLFlatLander
3 years ago
So, I mean So many reasons to NOT own an SC....Cervelo since Gerard and Phil sold has been a shambles...While some say you need a bike with "Soul", and I get it. The delusion that either SC or Cervelo are anything at all the same boutique bikes they were a decade ago? Um, no. Buy a bike with a Lifetime Warranty and move on....you will not regret it.
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jeff.brines
3 years ago
Huh? I don't follow the road side but every Santa Cruz I've thrown a leg over the last 3-4 years has been pretty damn good. Some of the best I've ever ridden.

This is an interesting move, and a reflection of a different era in the sport, but we'd all be smart to sit back and wait; see what the real consequences (or likely, lack thereof) are around this kind of roll up.
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FLFlatLander
3 years ago
Paying a premium for a boutique brand that is not a boutique brand is the main point. They used to be, they no longer are. Their warranty support has been a nightmare for a while (a friend of mine has two bikes currently sitting in a state of denied warranty). Other brands used to be -as bad- Trek, for instance before they had the lifetime warranty on their swing arm (this is I think 24mos or less since that started).

For those of us who keep bikes a while or actually ride off road...well, the warranty is key. Not every week but not infrequently we see broken stuff. That is where I thank god that with my brand (Specialized) - assuming the LBS is in good standing, warranty is a non-issue (but for availability as all companies have).

I know of a couple guys with broken (one NIB issue) from YT. Its a mess.

From there, I am going to leave the political spewings of SC outta this, that, in and of itself caused me to NOT buy a set of their $2500 XC wheels.
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FLFlatLander
3 years ago
I know. They have not pretended to be boutique since like, 89 or something :-)

Simply, hard to go wrong with Specialized, Trek, Giant.
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lister_yu
3 years ago
well - Giant and their warranty in our country is nightmare. Stopped working with them as every little bit is taking forever and was taking time out of my day I could use for repairs. Specialized is probably good with their bikes but a nightmare with their e-bikes. Long term customers (15-20 years) are thinking fo changing because fo their Levo´s. Brose motors still don´t work like advertised and the solution Specialized used to fix it is a joke.
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MPH24
3 years ago
SC has a lifetime warranty... SC isn't cheap but neither is Spec or Trek that you mention - top of the line bikes are $11K....

SC is a premium brand just like Spec, Trek... Mercedes, BMW, etc. SC has been a premium brand for the past 15 years, at least. The assumption that if the capital behind a company changes it leads to worse things is such an asinine take... People wouldn't buy companies if that process didn't work out the majority of the time and their are plenty of examples of companies with aging/less interested leadership falling by the wayside...
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FLFlatLander
3 years ago
"SC has a lifetime warranty... SC isn't cheap but neither is Spec or Trek that you mention - top of the line bikes are $11K.." -

Yep. I am blessed with an SWorks Epic Evo (2021). While I am personally very loyal to S, I did some serious shopping and talking to locals. The only issues I could find with warranty was two SC, and one buddy with a Trek (swing arm replaced three times and at X number of years no more warranty). In the instance with the Trek what "deal" cost the owner over $4000 to get riding again (as the old bike was not boost and the new one is boost).

The SC thing, even at the LBS they play it off as if it is a small boutique brand with a weed smoking hipster at the helm. You know, a dude (or Bro, what ever). Then talk to a guy with two broken bikes who SC tells to pound sand over a warranty - yep. All I need to know. At the end of the day, SC is not anywhere near as large as the anchor brands and do not have the capacity to support end users to the same level (at times).

I am sure they are good bikes, so many are....but, they (again) are not the boutique brand they try to pretend they are. Not necessarily a bad thing...but, being part of a conglomerate only puts the consumer that much further from the "give a shit factor" of the investors at the top.
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FLFlatLander
3 years ago
who is Joe Graney"? - FLFlatLander

A business guy who sold his business to the higher bidder (and good on him for making what I hope is a large fortune). He is also a business guy who disillusioned about 50% of his potential customers by brining his personal politics into his sales pitch to the public.
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jeff.brines
3 years ago
" SC is not anywhere near as large as the anchor brands...."

...might want to do some homework on that one.

You've really dug yourself a nice hole on this one. I'm not even sure what you are saying outside of just being mad a company (or a group of companies) grew?

On one hand you are talking about the obscure brotique (no typo) brands as though they somehow hold the keys to bike bro cultural holiness while you yourself ride an "anchor brand" (yet another made up term) because they can somehow warranty parts better?


I came back to write about the obnoxiousness of "warranty culture" in the bike industry but will leave it to another thread.
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FLFlatLander
3 years ago
Um, no, SC is nowhere near the scope of Specialized, Trek or Giant for that matter. They were a boutique brand...they cannot however support an average LBS as their anchor as the big three can. Sure, they have their downfalls (such as not wanting any non-branded items in the shop) and their flooring is very centric towards larger resellers (all but the one who I will not name who got pulled). Specialized can give you a bike from your strider to your S-Works in whatever flavor you want..and it can be one of the best on earth - MTN, eBike, Road, Tri...and give you a pair of shoes, helmet and clothing. This is not nessisarilly an insult to SC. There are many brands who do not want to be all things to all people. SC has go to be one (as they do not pretend to make road, tri, city, and youth bikes) -

But, when we look at history of the companies who buy boutique brands...could be Trek buying (and screwing LeMond). Could be ABG and their control of many now defunct brands of boutique bikes (and destroying the ones still there). In history, there is nothing too good for the consumer that can come from transactions such as this one...I could be wrong, history however has a tendency to repeat itself. I will not hold my breath that this is going to be a great thing, long term for SC or its fans.
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FLFlatLander
3 years ago
Oh, and all the time I hear that "my bike is - this or that or the other thing - and Trek, Specialized, Giant are inferred to be "from the man" or whatever. Currently the “bike with soul” seems to be YT.
Sure, there are a TON of very cool things from small shops. I hear ALL THE TIME from the local SC dealer that SC “really knows what the riders want” – oddly, the Epic Evo (no-brain) was out a year and a half before SC had a similar offering. But, I also have the friend who was told by SC two times with two bikes that broken frames are not warranty.
Swear to god, true story. TODAY (10/11) a friend was on his new bike. He had a TCR (Road). Fractured a chain stay (drive side, JRA). Two days, and an upgrade. It took two days for him to get his new TCR Advanced SL frameset in. My understanding is that if it were a Specialized, he went from a normal bike to an S-Works at no charge (I am not too familiar with Giant and their versions of S-Works or Project One).
Many small to medium sized brands simply cannot offer that kind of warranty support. They do not have the money for the inventory.
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jeff.brines
3 years ago
"Currently the "bike with soul" seems to be YT"

...ah yes, the company with an ex Amazon VP as CEO backed by private equity all the while cutting out bike shops. Yes, indeed, that company just screams "SOULLLLLLL"

Lol. This is a fake account right>?
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FLFlatLander
3 years ago
I wish about YT - but, at the trails the YT guys bond kinda like Harley guys (in the US). For some reason a hard to get average bike is an icon.....who am I to judge? One special one calls Specialized "Special-Ed" and just giggles to himself about how much cooler his YT is....

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