Groupe Bruxelles Lambert (GBL), a major Belgian-based investment company, has agreed to take over majority control of Canyon Bicycles, the German bike producer known for its direct-to-consumer approach. Roman Arnold, a former supplier of bike components who founded the brand in 2002, will reinvest a significant part of the proceeds alongside GBL. Arnold will remain as chairman of Canyon’s advisory board. Canyon will have many growth opportunities in the coming years, including further expansion in Europe and the U.S. and in the booming e-bike market, a company statement said. GBL is best known in Germany as a shareholder in the Adidas group (7 percent).
In the bidding process, for which Canyon is said to have mandated the investment bank Robert W. Baird, the company attracted several well-known investors. According to a Bloomberg report, Carlyle, KKR, Advent, Apax, General Atlantic and Permira were amongst the interested parties this October.
Tony Fadell, a former Apple executive, also joins Canyon with a minority stake. He will provide product expertise as a member of Canyon’s advisory board. Fadell led the teams that developed the iPod and the iPhone. He also founded Nest Labs ten years ago, a high-tech company that he sold to Google in 2014. After being appointed by Google in 2015 to lead the development of the Google Glass data glasses, Fadell left the company in 2016.
TSG Consumer Partners, which acquired a significant minority interest in Canyon five years ago, is cashing out completely. The valuation of the transaction was not disclosed, but TSG is probably coming out with a major capital gain in view of the fact that Canyon’s sales grew at an average annual rate of 25 percent in the last seven years. The German news channel n-tv said that the transaction is based on a company value of around €800 million, according to insiders. This corresponds to a valuation of about two times its revenue, which according to GBL is currently more than €400 million.
The deal is expected to be completed in the first quarter of 2021.
Canyon recently set up its own e-commerce operation in the U.S. The company is banking on the growing popularity of e-commerce and cycling in general, in the wake of the Covid-19 pandemic. Its products include road, gravel, mountain, city, trekking, kids and e-bikes.