A bang in the bicycle industry: A consortium led by the financial investor KKR wants to buy one of the market leaders for 1.56 billion euros: the Dutch supplier Accell with brands like Batavus, Winora and Koga, as those involved announced on Monday.

The chance of success is high: the board and the major shareholders Teslin and Hoogh Blarick support the takeover.

Accell shares shot up 24 percent on the Amsterdam Stock Exchange.

Klaus Max Smolka

Editor in Business.

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The bicycle industry is thus experiencing another chapter in the series of takeovers of recent years - this time a particularly sensational one.

Just as the car industry has recently featured the conglomerate with the artificial name Stellantis - with Opel, Alfa Romeo, Peugeot and other brands - the bicycle industry has known such brand conglomerates for a long time: in addition to the brands mentioned, Accell also offers Hercules, Sparta, Raleigh, Haibike, Ghost, Lapierre and the rapidly expanding Babboe cargo bikes.

The company sees itself as the European market leader for e-bikes and the second largest supplier of accessories.

Two conglomerates in the Netherlands

In addition, there is the second brand pool in the Netherlands, the family group Pon Holdings, which laid the foundation for its empire a good ten years ago: beginning in 2011 with the acquisition of Gazelle and, as a decisive step, subsequently with the purchase of what was then the largest German bicycle supplier, Derby Cycle Brands like Kalkhoff and Focus.

Accell reported in December on the course of the first eleven months of the year: Accordingly, the pre-tax profit (EBIT) rose by a third to 107 million euros and sales by 4 percent to 1.3 billion euros - with the company pointing out that the The comparable period of the previous year had been strong and, after all, one was confronted with a global shortage of bicycle parts.

A feast for fusion specialists

The industry has been a festival for takeover and stock exchange specialists for over a decade.

The biggest exclamation mark was the IPO of Derby Cycle in 2011, which then quickly rose to the small-cap index S-Dax before it was taken over by Pon less than a year later and disappeared from the list.

In the years that followed, there was some movement.

Most recently, the cycling industry benefited from the fact that many citizens discovered cycling during the Corona crisis as a leisure activity that could still be practiced during the lockdown - and as a way of getting to work without the risk of infection.

Private equity is also no stranger to the scene: the American TSG exited the Koblenz-based sports bike manufacturer Canyon, which went to a group of investors led by the Belgian financial holding Groupe Bruxelles Lambert (GBL).

The overall valuation was estimated in financial circles at around 800 million euros.

The financial investor Finatem stirred up the industry twice: it held Derby Cycle in its portfolio for years and took the company public.

Last year he brought the transmission parts manufacturer H-Gears onto the floor, which generates almost a third of its sales in the bicycle industry.

Private equity pounces on manufacturers 

Before it was taken over by Pon, Gazelle was also with a financial investor, namely Gilde. Pon, in turn, recently acquired the bicycle subsidiary of the Canadian conglomerate Dorel Industries for 700 million euros - and thus brought other global brands into the house, such as Cannondale and GT. The company now describes itself as one of the top five bicycle manufacturers in the world. Behind Pon is one of the richest families in the Netherlands; The core business includes car sales, including imports from Volkswagen. Together with VW and the asset manager Attestor, the company takes over the car rental company Europcar for 2.5 billion euros.

Accell and Pon have also wrestled: Accell, like Pon, was once interested in Derby Cycle, but quickly bought up a larger block of shares after its IPO.

But in the end they gave up, sold their own Derby share package to Pon and thus left the compatriots to the German competitors.

In 2017, Pon again bid for Accell.

The rival entered into negotiations but broke them off.

At the end of 2018, Pon bought a 20 percent stake in Accell – without saying exactly what it intends to do with it.

That has since been dismantled.

Commitments to Accell 

In the latest offer, KKR is now teaming up with the Teslin fund, which holds almost 11 percent in Accell.

The consortium is offering shareholders 58 euros in cash per share, a good quarter more than the closing price on Friday.

Hoogh Blarick, which has a stake of around 7.5 percent, supports the takeover plan.

It is expected to be completed late in the second quarter or early in the third quarter.

KKR is being advised on the transaction by Goldman Sachs and Accell by Axeco Corporate Finance.

CEO Ton Anbeek and Chief Financial Officer Ruben Baldew are said to continue to lead the company - although KKR's history shows that such announcements can be short-lived, depending on how much change the investor sees in the acquired company. Both sides tried to signal continuity on Monday: the consortium supports Accell's strategy. The head office will remain in Heerenveen. Employees retained all acquired rights, "and no reduction in the group's workforce is envisaged as a direct consequence of the transaction". Here the linguistic back door draws attention “directly”. Away from the stock market, the company can better fulfill its long-term plans,argued the parties involved in their communication - an argument for a takeover that has often been heard in recent years. KKR is itself publicly traded. The stock fell sharply on Monday.