It’s been announced that Fox Factory Holding Corp are purchasing Raceface and Easton Cycling for a price of $30.2 million. This will see another change of ownership for Easton who were recently acquired by Raceface, which was resurrected from bankruptcy in 2011 by owner Chris Tutton.
The move should allow Fox to make a much better offer to OE customers with cranks, cockpits and wheels offered on top of the current suspension package. As yet it’s unclear how it will affect distribution of the brands in the UK, expect more news as we get it…
Here’s the official press release from Fox:
SCOTTS VALLEY, Calif., Dec. 5, 2014 (GLOBE NEWSWIRE) — Fox Factory Holding Corp. (Nasdaq:FOXF) (“FOX”) today announced, that through certain of its subsidiaries, it has entered into a definitive agreement to acquire substantially all the assets of the Race Face and Easton Cycling businesses, formerly Race Face Performance Products, Inc. and 0999324 B.C. Ltd. (together “Race Face/Easton”). Race Face/Easton designs, manufactures, and distributes high-performance mountain and road bike wheels and other high-performance cycling components including cranks, bars, stems, and seat posts, globally to OEMs and the aftermarket.
“We are very excited about the Race Face/Easton acquisition and look forward to welcoming their team to the FOX family,” stated Larry L. Enterline, FOX’s Chief Executive Officer.“This transaction demonstrates the execution of our strategic initiatives to increase FOX’s product penetration into both existing and adjacent product categories to help drive our bike sales and profitability long-term. We look forward to leveraging our global marketing, engineering, distribution, and supply chain resources to collectively develop next-generation, high-performance bicycle ride dynamics solutions.”
“We believe that FOX and Race Face/Easton are a perfect fit as we complement each other with our distinct high-performance mountain bike product lines,” said Chris Tutton, President of Race Face/Easton. “The added operations, marketing, and engineering support from FOX will allow us to innovate faster while remaining focused on our core businesses.”
FOX will acquire Race Face/Easton in an asset purchase transaction for approximately $30.2 million. The transaction was financed with debt and includes a potential earn-out opportunity of up to a maximum of $17.4 million payable over the next two fiscal years contingent upon the achievement of certain performance-based financial targets. On a combined basis, Race Face/Easton generated approximately $23.6 million in unaudited net sales and unaudited Adjusted EBITDA of approximately $4.3 million in its fiscal year ended October 31, 2014. FOX expects Race Face/Easton revenue growth in the high single digit range, and expects to invest in Race Face/Easton to strengthen its infrastructure and maximize the long-term potential of the business. The Company plans to provide 2015 guidance along with its fourth quarter and fiscal 2014 earnings announcement. The Company anticipates the transaction to close by the end of 2014.