Lance Armstrong switches from Shimano to SRAM Red and invests in companyDespite the collapse of the Lehman Brothers parent company, SRAM and Lehman Brothers Merchant Banking (LBMB) have completed their transaction, giving LBMB a 40 percent stake in SRAM.
"Getting to the finish line, given the current state of the financial markets, is a reflection of LBMB’s role as one of the leading private equity organisations in the middle market and our strong SRAM management team," said Stan Day, chief executive of SRAM.
Charlie Moore, LBMB managing director, said:
"All of us at LBMB are thrilled to be closing our investment in SRAM. The company is a leader in its industry with tremendous momentum and a bright future. We look forward to working with SRAM’s management team to build the business and realise its full potential in the years to come."
The final inking of the deal - which could have been derailed by the collapse of Lehman Brothers - sees the formation of the $10m SRAM Cycling Advocacy Fund. These funds will be used over the next five years to support efforts to improve cycling infrastructure.Article continues below
As a result of the transaction, Charlie Moore and Bill Lovejoy, also a managing director at LBMB, will join the SRAM Board of Directors. The SRAM management team remains intact.
Lance Armstrong has made a "meaningful passive investment" alongside LBMB to strengthen his ties with SRAM. His stake is believed to worth millions of dollars.
BikeBiz was present at CrossVegas last week when LBMB execs introduced themselves to Armstrong as he was warming up for his first comeback race.
Armstrong’s use of SRAM components will become a part of the SRAM overall marketing program. He will also serve as a technical advisor for SRAM’s product development teams.
Day said "The entire organisation welcomes Lance to the SRAM team. We are looking forward to his input and doing everything we can to support his return to racing."