From BMXNEWS Head Honcho Mike Carruth
Bicycle Retailer and Industry News (BRAIN) reported this week that Accell Group, N.V., the Netherlands-based owner of the former Seattle Bike Supply portfolio of bicycle brands (among considerable other bicycles assets), has sold its US business, including three bike brands to California investment group Regent, LP.
Inside that bushel of bike, brands are BMX giant, Redline Bicycles. Former BMX brand, DiamondBack is also moving to Regent, as is e-Bike brand, iZip. Raleigh, and a list of other brands will remain with Accell.
Earlier this year, Regent purchased French road/track/MTB stalwart, Mavic, and that acquisition is already showing some groove in the marketplace.
The sale, which included Redline, was finalized on Tuesday (August 6) for a purchase price reported to be ONE DOLLAR (yes you read that right), but with a potential “earn-out” of up to USD$15 Million.
Such a structure makes good sense for all parties, as it gives Accell a quick resolution to the sale of the business unit and the three brands, and allows Regent to acquire these assets for low-to-no out of the pocket investment. Based on CEO quotes published by “BRAIN,” it seems Accell wanted to waste no time effecting and completing a sale, saying:
“With this announcement, we have completed the strategic review of our North American business. This allows us to eliminate profit dilution…The completion of the strategic review results in a one-off charge which we will absorb in H2 2019.”
The business unit lost $12.2 Million in the first half of 2019, according to the report. That bleeding stopped (at least as far as Accell’s balance sheet was concerned) on August 6, when the deal was closed.
The sale comes on the heels of the Accell’s sale of all Canadian rights to the Redline, DiamondBack, iZip and Raleigh brands to retailer Canadian Tire for $16 Million in cash.
To some, the Canadian deal was a foreshock to the Earthquake that occurred this week with rest the brand registrations being sold. To others, there was no “earthquake” at all–everything that went down was figured to be inevitable, however, it might have unfolded.
We reached out to contacts at Redline to find out if there was any indication of how the future might look for the BMX Racing product line and program, as Regent takes over the brand. No reply, just yet, so we’ll update the story when more details are available.