by Company is selling bicycle segment to Pon Holdings B.V. for $810 million in cash, shifts focus to furniture, baby products
MONTREAL, Quebec – In a move that will allow the company to focus almost exclusively on its baby products and home furnishings business, Dorel Industries has reached an agreement to sell its bicycle segment, Dorel Sports, for $810 million in cash.
The company said it is selling the division to Pon Holdings B.V. a Dutch mobility group. It expects the sale to close before the end of the first quarter of 2022.
By selling the division, the company will shift its focus to its baby products and juvenile furniture divisions, as well as its Dorel Home furniture segment.
The baby and juvenile product brands include Maxi Cosi, Cosco, Safety 1st, Tiny Love, Bébé Comfort, Infanti and Quinny.
The Dorel Home segment includes DHP, Little Seeds, Dorel Living, Ameriwood Home, Signature Sleep and Cosco Home & Office.
Dorel said it will use net proceeds from the sale of about $735 million to reduce indebtedness, return capital to shareholders and for other general corporate purposes. The company said it will announce further specifics about the use of the net proceeds at the time of closing.
The company said the sale has been unanimously approved by the company’s Board of Directors and that it is subject to customary closing conditions, including certain regulatory approvals and the “absence of any material adverse changes with respect to Dorel Sports until closing.”
The company also noted in a release that the sale is not subject to any financing conditions and that the transaction will consist of the sale of 100% of the shares of Dorel’s indirect, wholly owned subsidiary Dorel Sports companies along with certain related assets. The Dorel Sports brands include Schwinn, Cannondale, GT, Caloi, Mongoose, Charge and KidTrax.
The company added that “under applicable corporate law, the transaction is not subject to approval by Dorel’s shareholders.”
“Acting on feedback from our shareholders, Dorel embarked on a thorough review of strategic alternatives earlier this year.” Martin Schwartz, Dorel president and CEO said in a statement. “Our objective has consistently been to create value for our shareholders. The divestiture of Dorel Sports represents a unique opportunity to unlock value by capitalizing on strong demand for scaled assets in the bicycle segment.”
He added, “On behalf of the Board of Directors, I extend my sincere thanks to the entire Dorel Sports team for their outstanding efforts over the years. Dorel Sports has been an important part of our organization since 2004, and we are very proud of the global success it has achieved. While making the decision to sell Dorel Sports has been difficult, we are confident that this transaction represents full value for Dorel shareholders.”
In a related development, the company said it also plans to make $10 million in capital investments at its three Dorel Home North America plants, including at two RTA Ameriwood plants in Tiffin, Ohio and Cornwall, Ontario and at its Dorel Home Products plant in Montreal, Quebec. This investment aims to shift some of its current production in Asia to North America and help address industry-wide supply chain issues. The company said this investment also will better position the RTA segment for growth “with value-added, innovative new products.”
The company also is purchasing Denmark-based ecommerce home furnishings resource Notio Living for about $19 million. The purchase is expected to close later this year.
