Investors Don’t Hit the Brakes on Cycling M&A in 2021

Gym Closures and Stay at Home Orders Gives Early Boost to Peloton Amidst COVID Pandemic

  • Consumers under lockdown scrambled to find in-home activities to substitute for everyday leisure and exercise. Peloton became the favored purchase for housebound consumers, which lifted the Company’s second and third-quarter sales by 172% and 232%, respectively, from the same periods in 2019. Although subscriptions have doubled since March, many Peloton riders had to wait months for their bikes to arrive as surging demand strained the supply chain.

Global Surge in Cycling Continues Amidst the Pandemic

  • The Pandemic is forcing consumers to explore new outdoor activities and transportation methods, resulting in a global cycling boom. Data from fitness tracking app Strava, shows major U.S. cities such as Los Angeles and New York have seen year-over-year increases of 93% and 80%, respectively, and data from the British Government shows average daily cycling usage at 130% of pre-lockdown levels.
  • The uptick in cycling activity is driving demand for new bikes and putting significant pressure on production and distribution. Dorel Sports, which owns Cannondale, Schwinn, and GT Brands, among others, saw revenue increase by 24% from 1H’2020 to 1H’2021, but could not fill orders to meet demand and began the year with almost no bikes available at the retail level. Supply chain disruptions due to COVID-19 are causing major bikes brands to increase prices on their 2021 lineups by as much as 12% for some models.

Large, Established Brands dominate the Market for Bicycles; Meanwhile, Disruptive Brands Have Emerged in the Cycling Apparel and Accessories Market

  • The top ten bike brands, led by Trek, Giant, and Specialized, account for nearly 70% of the U.S. market.
  • Disruptive cycling apparel and accessories brands have attracted strong valuations from private equity groups: Most recently, The Compass Group recently acquired BOA Technology, a manufacturer of alternative shoe lacing systems, for $454M, and in late 2017, RZC Investments acquired Rapha Racing, a high-performance and lifestyle cycling apparel provider, for $261M.

The Last Twelve Months Have Seen Several Notable Bicycle and Cycling Apparel and Accessories Transactions

The Compass Group acquires BOA Technology for $454M, October 19, 2020
  • BOA Technology is a Denver, CO-based creator of the BOA Fit System that offers an innovative shoe lacing solution for the outdoor, athletic, workwear, and medical bracing markets. The acquisition allows BOA to leverage Compass Group’s consumer brand expertise and global resources to accelerate growth across all product categories.
Lectric eBikes was acquired by Bertram Capital Management for an undisclosed sum, December 1, 2020
  • Lectric eBikes is one of the largest and fastest-growing direct-to-consumer retailers of electric bicycles and accessories. The investment from Bertram will help Lectric expand on its current word-of-mouth marketing strategy to reach a broader customer base. This investment represents Bertram’s 26th investment in the eCommerce sector.
Echelon received $65 million of development capital led by North Castle Partners (current investor) and Goldman Sachs, December 28, 2020
  • Echelon Fitness develops innovative fitness solutions ranging from indoor bikes and rowers to touch-screen fitness mirrors. They also have an app allowing members to participate in live fitness classes. Jon Canarick, Managing Partner of North Castle Partners, commented, “North Castle was excited by the opportunity at Echelon to offer a great product at competitive prices before the global pandemic set-in. We have experienced explosive growth and we are very excited to have Goldman Sachs invest in the business alongside us. We have complementary experience and I’m looking forward to working with the Goldman team.”
Canyon Bicycles was acquired by Groupe Bruxelles Lambert (BRU: GBLB) for €400 million (~$480 million), March 9, 2021
  • German-based Canyon Bicycles, which offers direct-to-consumer road and mountain bikes, has averaged 25% annual growth over the past seven years.  For the fiscal year 2020, growth was over 30% with sales of €400 million. As part of the transaction, GBL is believed to have taken a 60% stake in the business while significant minority shareholder TSG Consumer Partners will fully exit. The acquisition resulted in an implied enterprise value around $800 million.
Dorel reached a definitive agreement to sell its sports segment to Pon Holdings for $810 million, October 11, 2021
  • The combination of Dorel Sports and Pon Bikes will establish one of the world’s leading bike companies with combined revenues or around €2.5 billion. The acquisition fits Pon Holdings strategy to build a complete portfolio of traditional bikes, e-bikes, and related accessories manufacturer from top brands including Cannondale, Schwinn, Caloi, Gazelle, Swapfiets, Kalkhoff, Cervélo, Santa Cruz, and more. The transaction is expected to close before the end of Q1 2022.

Intrepid’s Lifestyle Brands group continues to track the paradigm shifts for brands in every category as consumer trends evolve in the “new normal.” Strong outdoor and hobbyist consumer brands have had a uniquely good year as consumers become more discerning in 2021 by turning to purchasing online more than ever before. How have your consumer purchasing habits changed since March 2020? We’d love to hear from you.

Sources: Global Newswire, Pitchbook, Bloomberg, Company Filings and Press Releases, Pinkbike, CyclingIndustry, News,

About Intrepid’s Lifestyle Brands Practice

Intrepid’s Lifestyle Brands practice combines decades of experience assisting businesses with a passion driven consumer brands across categories including apparel, accessories, footwear, and retail with expert execution in various transaction types, including capital raises, mergers, acquisitions, and divestitures. We maintain deep relationships with strategic acquirers, private equity investors, and leading executives active in the industry.