Support road.cc

Like this site? Help us to make it better.

Back to news
news
Miscellaneous
Canyon set for €500m+ private equity sale?2021 Canyon Aeroad CFR Dura Ace Di2.jpg

Canyon set for €500m+ private equity sale?

Private equity giants KKR and Carlyle said to be among suitors for German direct-to-consumer brand
by Simon_MacMichael
Thu, Oct 22, 2020 19:12
8

Canyon, the direct-to-consumer bike brand whose latest Aeroad model was ridden to victory at the Tour of Flanders last Sunday by Mathieu van der Poel, is in the sights of private equity investors for a potential sale worth €500 million-plus, according to Bloomberg.

Suitors for the Koblenz, Germany-based business are said to include US-based private equity giants KKR & Co and Carlyle Group, as well as Advent International, Apax Partners, General Atlantic and Permira.

The bike brand is reported to have appointed the investment bank Robert W. Baird & Co on a potential sale of the business, although discussions with interested parties are ongoing with no final agreements reached as yet.

Interest in the business is said to have been sparked by the growth in cycling in urban areas in Europe since the COVID-19 crisis started earlier this year.

However, the bicycle sector, particularly at the high end, has proved attractive to investors in rece t years.

Italian brands Pinarello and Colnago have both been sold to private equity firms, while Rapha is now majority owned by an investment firm owned by two of the heirs to the Wal-Mart grocery fortune.

Canyon
Simon MacMichael

Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.

Add new comment

8 comments

Avatar
HoarseMann | 4 years ago
1 like

It was reported a few weeks ago that the founder was stepping back from the company. With the recent strong sales and growth, you can see it's a good time for them to sell the company and convert those shares to cash in the bank.

https://www.pinkbike.com/news/canyon-founder-and-ceo-roman-arnold-steps-...

Avatar
Cannoli | 4 years ago
0 likes

Is it a sale to a third party or and investment by equity firms? I've read several articles over the last few days and some say sale while others say investment. I'm mixed emotionally on this news, likely due to the fact that I've been contemplating the purchase of two Aeroad's when they are available next month (for my wife and I). We already own an Ultimate and an Endurace, and feel like we found a new "home" cycling brand in Canyon.  Now I'm a bit torn. Yeah, I know this is an emotional reaction as the bike will still perform despite who owns the company in the future. I'm still trying to put a name to the feeling I have over all of this.

Avatar
Milkfloat | 4 years ago
2 likes

Well that is another brand that will get screwed up then. 

Avatar
Biggie Smells replied to Milkfloat | 4 years ago
1 like

Milkfloat wrote:

Well that is another brand that will get screwed up then. 

Can you elaborate? In what way will they get 'screwed up'? 

Avatar
TheBillder replied to Biggie Smells | 4 years ago
6 likes

Standard private equity playbook: buy company with borrowed money, cut costs, load it with debt to repay the loan that bought the company, get profits out using debt repayment for tax reasons, cut costs, founders / creators leave, cut costs, flog on to someone else who hopes to rinse and repeat. Oh, and mostly use tax havens and a web of holding companies to further reduce tax.

Private equity always believes it can "unlock value" in a target business and it's never by investment into doing the good stuff better; always by extraction of cash.

Avatar
luisgutz replied to TheBillder | 4 years ago
3 likes

I completely agree with what you just said, I just want to correct this:

...".Private equity always believes it can "unlock value" in a target business "...

It's not so much they believe they can unlock value, but it is what they use to justify their behaviour to everyone else. They must know they have been killing the companies they buy

Avatar
Woodcity123 replied to luisgutz | 4 years ago
2 likes

TheBillder is right. Buy, load with debt, take fees, charge fees, kill R&D and  innovation as not profitable in the short term (ie: before exit), wave banners and push marketing to drive top line revenue, package for the next VC. Im a big Canyon fan; was planning on ordering nre Aeroad next year - will now wait....Canyon would be better to IPO, invite owners and fans to participate and get value out that way. Make the compnay owned by the users 

Avatar
Wibbly replied to Milkfloat | 4 years ago
0 likes

I have an ultimate AL that's 8 years old and it's still my favorite bike but I wouldn't buy another. I was looking at the aluminium Grail but noticed it now ships with a Token Ninja bottom bracket rather than the PF86 that it originaly shipped with, if they've had to switch from a £20 BB to a £60 BB designed to stop creaking they've clearly got some problems. It's sad to see a company that started out doing top end engineering has slowly outsourced all it's manufacturing to the far east and is now finaly set to get swallowed by accountants. 

Latest Comments