Ownership of the Cannondale Bicycle Corp. is headed north of the border with its purchase by Montreal-based Dorel Industries.
A huge consumer products company, Dorel markets Schwinn, Mongoose, GT, Roadmaster, Murray, InSTEP and Playsafe through its Pacific Cycle division.
In announcing the $200 million purchase, company officials said Cannondale would operate as a separate group aimed at independent bicycle dealers, while the other bike brands will continue to target the mass merchandisers.
At its heart, Dorel is a $1.8 billion conglomerate that operates in the juvenile products, home furnishings and recreation/leisure segments.
Juvenile products, such as the Cosco and Safety First brands, accounted for slightly more than half of sales in 2006, while the division that markets bicycles accounted for about 19%. The Ameriwood ready-to-assemble furniture division made the up the remainder.
Dorel says a new independent bicycle dealer division will be created to house the Cannondale Sports Group. Cannondale and GT bicycles, as well as Cannondale's Sugoi Performance Apparel, will be part of this new group.
The new group will be run by Jeff Frehner, who is moving over from a similar position in Dorel's Pacific Cycle group. Other Cannondale managers, including president and CEO Matt Mannelly, will stay on.
In addition to running the new premium bicycle division, they'll be looking to buy other premium bicycle brands.
With the Cannondale acquisition, Dorel will be the third largest player in the independent bicycle dealer business, behind Trek and Specialized.
The Bethel, Connecticut-based Cannondale was privately owned by an affiliate of Pegasus Capital Advisors, which bought the company in 2003. Cannondale had about $200 million in sales last year.
The challenge for Frehner and his group will be ensure the Cannondale's reputation for making high-quality bicycles remains intact.
Cannondale started out making bike trailers above a pickle factory in 1971. It introduced its first bike, a touring model in 1983. It was the first to produce affordable, lightweight aluminum frames that were stiffer than most steel frames common at the time.
Since then, it has gone on to market 80 models around the world. It not only captured many racing wins, but earned design and technological development awards.
Meanwhile, the bicycles targeted for mass merchants will remain under Pacific Cycles, which Dorel purchased in 2004. Those brands will include Schwinn, Mongoose and Roadmaster.
The Pacific Cycle division also markets jogging strollers, electric and gas scooters, swingsets, and ride-on toys.
Based in Madison, Wisconsin, Pacific Cycle is the leading supplier of bicycles in North America, according to Dorel's 2006 annual report. Its bicycle production is sourced primarily through China.
First seen at Urban Velo