Germany's Canyon for sale as pandemic pushes cycling, sources say (updated)

Giant Manufacturing Co

21/10/2020 13:02

(Adds detail)
    By Arno Schuetze
    FRANKFURT, Oct 21 (Reuters) - German bicycle maker Canyon is
for sale as founder Roman Arnold and minority stakeholder TSG
Consumer Partners seek to tap into demand spurred by the
pandemic, three people close to the matter said.
    Investment banking boutique Baird last week sent out
information packages to prospective private equity bidders,
including KKR, Ardian, Partners, Permira and General Atlantic,
the people said, asking not to be named.
    Buyout group TSG Consumer Partners has put its minority
position up for sale, while the founder Roman Arnold is also
offering shares, giving any buyer the possibility of acquiring a
majority in the firm, the people said. 
    Canyon and TSG had no immediate comment and Baird declined
to comment. 
    As COVID-19 has encouraged people to use bicycles more for
exercise and to avoid public transport, Germany saw a 9.2% rise
in bicycle sales in the first half of the year, industry group
ZIV said last month.
    Following the sales increase, Canyon is expecting to post
earnings before interest, tax, depreciation and amortisation of
54 million euros ($64 million) this year.
    Listed Asian peers, such as Giant  9921.TW  and Merida
 9914.TW , are trading at 15 and 29 times their expected core
earnings. 
    Canyon could be valued at about 15 times its core earnings
or about 800 million euros ($948 million), including debt, one
of the people said.
    The company, founded in 1985 as a bicycle retailer, started
producing Canyon-branded bikes in 1996 and TSG bought a minority
stake in 2016, enabling an expansion of Canyon into the United
States.

 (Reporting by Arno Schuetze; Editing by Tom Sims and Barbara
Lewis)
 ((arno.schuetze@thomsonreuters.com; +49 30220133648;))