Huf recycled news - some sentiments still apply
If Brunswick division was worth 60 mill
04/27/01 12:17 pm
Msg: 5994 of 9129
What is the Huffy division worth? Anybody know how many units Huffy sold? IMO-the value of Huffy assets is worth more now, than when Brunswick sold to Pacific. Why-?
1. The company has no more long term debt
2.Manufacturing costs are down ( the China Connection)
3. The price of gas has risen (what form of family recreation is less like to be cut back or more likely, more spending being done. (IMO-bikes)
4. Parents can have the bike assembled at the store for no extra cost at many big retailers.
(Huffy's service first division benefits from this)
This sale happened in Jan.
Pacific Cycle, LLC, of Madison, WI, has purchased Brunswick's bike division for $60 million, $48.5 million of it in cash. Included in the sale are the Mongoose, Mongoose Pro, and Roadmaster brands.
Coffrin Group Analysis.
Pacific Cycles is an aggressive and innovative firm in the USA mass market. Pacific -- not related to the Taiwan bike factory with a similar name -- sold over 1 million bicycles in 2000. Brunswick's brands sold a stunning 4,000,000 units.
Pacific Cycle's financial power comes from majority owner Wind Point Partners, a private equity investment firm headquartered in Michigan. Chris Hornung, Pacific's CEO, has consistently attracted top design talent, run a lean organization, and pursued a strategy of marketing higher quality bicycles to mass merchants.
Pacific's main customer has been Toys-R-Us, followed by Target, Sears, and Kmart. Brunswick's main customer has been WalMart, followed by numerous others.
The majority of Pacific's sales and the majority of Brunswick's sales go to non-overlapping customers. It seems to this observer that keeping in place the strong Brunswick sales team will be important for the next year. A continuity in sales contacts can go a long way to smoothing the transition with Brunswick's existing customers.
It's not yet clear how well this large acquisition will work, but Pacific Cycles is now the number one player in the mass sector.
What will the Mongoose Pro brand do in the specialty sector? With GT veteran Bob Ippolito now part of Pacific's management team, this could be interesting. If Pacific decides to walk away from the IBD sector, it will not be because of a lack of talent to succeed. |
