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Dorel Spends US $5.2 Million
to Buy
Iron Horse Bicycle Co. of New
York
Montreal, Canada
Dorel Industries (TSX:DII.B) has
enlarged its recreational division yet again by purchasing bankrupt Iron
Horse Bicycle Company of New York for US $5.2 million. The purchase by
Montreal-based Dorel includes US $5 million of cash.
"This latest purchase is in line with
the strategic road map we have developed to build our bicycle business into
the leading global bicycle company, "stated Dorel president and CEO Martin
Schwartz.
He said Dorel hopes to significantly
grow Iron Horse's sales, which were US $25 million in 2008.
Founded in 1987, Iron Horse is best
known for its downhill and extreme trail bikes, which have a reputation for
superb handling, Dorel said. In 2003, it received Mountain Biking
Magazine's "Bike of the Year" award. Robert Baird, president of
Dorel's recreation and leisure segment said the addition of Iron Horse
strengthens its mountain biking offerings.
"With growing interest in mountain
biking and racing, the addition makes Dorel better suited to reach new
retailers and, in turn, consumers," he stated. Four other companies
tried to buy Iron Horse and at least 90 offers were presented in bankruptcy
court, according to the website of Bicycle Retailer.
Iron Horse's bicycles are made in
Asia. The company was thrown into bankruptcy in March by three
suppliers in China and Taiwan owed more than US $5 million. It also
owes US $17 million to other creditors and US $4 million to secured creditor
CIT Group. Dorel's purchase includes the inventory, trademarks and
patents of Iron Horse.
The Canadian company tried to purchase
Iron Horse last year by negotiating with its lenders, but the parties were
unable to reach an agreement. It wasn't immediately clear if Dorel
will inherit the legal claims that surround the bankruptcy. Iron Horse
president Cliff Weidberg is suing two former company executives for
allegedly falsifying financials to inflate the value of the business.
In 2004, Dorel became one of the
largest marketers of recreational products in North America with its
acquisition of Pacific Cycles, a leader in the design, marketing and
distribution of high quality branded bicycles and other recreational
products. In February 2008, Dorel purchased the Cannondale Bicycle
Compnay and SUGOI Performance Apparel, further solidifying its presence in
the bicycle industry.
Dorel is a leading bicycle
manufacturer with other brands such as Schwinn, GT, Mongoose Dyno,
RoadMaster, Powerlite and InStep. It also makes juvenile products such
as car seats and ready-to-assemble furniture. Feel free to visit
Dorel
Corporate Website for more information.
Source:
The Canadian Press
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Posted By: Diesel
Date: 07/25/2009 |
