AMER Sports Buys ENVE for 50m
It seemed clear that ENVE was ripe for the picking. The company grew quickly and, despite a few hiccups, has been making high quality, top performing products. ENVE’s new owner, AMER SPORTS, founded in 1950, is a Finnish conglomerate that has gradually evolved from industrial interests into a firm focussed on sporting goods. Their other brands include Salomon, Arc’teryx and Mavic (see below for more of their brands). As of this writing their stock is trading at €25.33 giving them a market cap of €3.002B. Can another massive corporation snapping up a boutique brand be good for the cycling consumer? Not long ago cycling brands owned by publicly traded behemoths were uncommon, but it seems the trend is accelerating. An exception is Pon Holdings, new owner of Santa Cruz, which is a massive, but privately held company.
Press Release:
To accelerate its Cycling business, Amer Sports Corporation has acquired ENVE Composites LLC, based in Utah, USA. ENVE is a fast-growing brand in high-end carbon wheels, components, and accessories for road and mountain biking with annual sales of approximately USD 30 million. The acquisition accelerates Amer Sports Cycling business especially in the United States and provides further expansion opportunities internationally. ENVE brings capabilities in carbon technology, and it offers operational scale and synergy benefits complementing Amer Sports’ cycling category.
The acquisition price is USD 50 million in an all-cash transaction. The acquisition will have no material impact on Amer Sports’ 2016 financial results, and it will be accretive to Amer Sports EBIT margin as of 2017. The closing of the acquisition is expected in the first quarter of 2016.
AMER SPORTS
Amer Sports (www.amersports.com) is a sporting goods company with internationally recognized brands including Salomon, Wilson, Atomic, Arc’teryx, Mavic, Suunto and Precor. The company’s technically advanced sports equipment, footwear and apparel improve performance and increase the enjoyment of sports and outdoor activities. The Group’s business is balanced by its broad portfolio of sports and products and a presence in all major markets. Amer Sports shares are listed on the Nasdaq Helsinki stock exchange (AMEAS).
Will this make ENVE wheels more or less affordable?
Comments
Mike
8 years, 1 month ago
This is great! Now that the original owners of ENVE have cashed out, I feel less guilt about buying my beautiful carbon rims from light bicycle (dot com).
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Luix
8 years, 2 months ago
Many MTB sites were asking for Mavic's carbon hoops. Then their controlling holding decided it was cheaper to just buy out a established product. The world grows smaller, competition gets reduced… So much for the American Dream…
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Merwinn
8 years, 2 months ago
So ENVE's creators don't deserve to build something from the ground up and profit from their hard work? Luix, FYI, that IS the American dream.
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Luix
8 years, 2 months ago
I get your point, but I thought being proud of your product while making a living was part of the dream… Like I said before, competition gets reduced every time a corporate giant buys out these small but efficient companies.
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Nat Brown
8 years, 2 months ago
I'm with you Luix, but maybe that's the dream for us regular folks. I think there's a satisfaction in that that is attainable by pretty much everyone.
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YVR
8 years, 2 months ago
It's going to make ENVE wheels lower-quality at the same price. Same as what happened to Chariot when Thule bought it (for those with kids). Same as what typically happens when any corporate entity takes over a boutique brand - increase profit margin.
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