Having confirmed that discussions were under way earlier this month, Accell Group NV has reached agreement on the acquisition of all issued shares in Raleigh Cycle. The acquisition of Raleigh adds well-known global brands to the portfolio of Accell Group and further strengthens Accell Group’s position in North America and the UK in the markets for bicycles and bicycle parts & accessories. In addition, the acquisition also boosts Accell’s sourcing activities in Asia.
In conjunction with the acquisition of Raleigh, Accell Group has today also announced the launch of an accelerated share issue of up to 2,000,000 new ordinary shares (less than 10% of Accell Group’s share capital).
Accell Group values Raleigh (including average debt) at around €76 million ($100 million). The acquisition price for the Raleigh shares is approximately €60 million. Raleigh’s best known global brands are Raleigh and Diamondback, which are seen as complementary to Accell Group’s bicycle brand portfolio.
The closing of the acquisition is subject to approval of the German competition authorities and is expected to occur at the end of May 2012. Excluding transaction costs and on a pro forma basis, it is expected that the acquisition will immediately contribute to Accell Group’s earnings per share.
René Takens, Chief Executive Officer of Accell Group said, “We are very pleased with the acquisition of Raleigh, another milestone for our company. Acquiring Raleigh adds a strong traditional and global brand with a rich heritage to our brand portfolio and with the Diamondback brand we strengthen our position in the mountain bike and BMX segment.”
Takens added, “We also strengthen our position in bicycle parts & accessories in North America and the United Kingdom improving Accell Group’s global competitiveness in this field. The acquisition will expand our activities to new geographical markets while benefiting from purchasing advantages through increased economies of scale. We have great confidence in Raleigh’s management team and will fully support future growth of Raleigh within our group.”
Alan Finden-Crofts, Chief Executive Officer of Raleigh Cycle said, “I am delighted with the conclusion of the sale of Raleigh to Accell Group. As talks progressed with the various interested parties earlier this year, Accell Group emerged as the clear preferred buyer for the business, given the highly complementary product range and geographic presence of the two businesses.
“In Raleigh, Accell Group is acquiring a true global brand with 125 years of heritage and distribution into over 140 countries worldwide and I am entirely confident that Raleigh has found the ideal buyer to support the employees, customers, suppliers and the future growth of the business.”
By acquiring Raleigh, Accell expects to realise significant potential synergies in the fields of supply chain, sourcing in Asia, purchasing advantages through economies of scale and intensified distribution of the brands of Accell Group and Raleigh in their respective markets.
It will be further investigated whether combining Accell Group subsidiaries or activities with Raleigh business units or activities makes sense. Accell Group currently envisages realising annual synergies of €2–3 million in the course of two years.
Raleigh is characterized by a comparable decentralised business model and its operating companies will continue to operate as independent subsidiaries within Accell Group. Raleigh’s management team is expected to stay after the acquisition; CEO Alan Finden-Crofts will stay at least another 6 months.