BikeBiz Bicycle and cycling retail news
SRAM announced today a new equity partnership with Lehman Brothers Merchant Banking (LBMB), one of the seven asset classes of Lehman Brothers’ global private equity business. LBMB will be a minority investor in SRAM. SRAM senior management will continue to lead the company.
"The SRAM team has done a great job building a global organization in an exciting industry," said Stan Day, chief executive of SRAM. "We have now achieved scale where we believe it is prudent to add an experienced institutional investor to our shareholder base. We are very pleased that LBMB is committing its capital and expertise to SRAM."
Charlie Moore, LBMB managing director, said:
"SRAM has grown to become a true leader in its industry without losing touch with its entrepreneurial roots and its core values."
In connection with the transaction, the company is establishing the SRAM Cycling Advocacy Fund. The Fund, initially capitalized with $10 million, will support bicycle advocacy in the US, Europe and Asia on policy issues affecting cycling infrastructure and the bicycle industry. These funds will be paid out approximately $2 million per year for five years. SRAM will seek advice from leading industry associations on proposal evaluation and fund distribution and expects to have a grant request process in place by November.
"Bikes are a constructive transportation and recreational solution. Governments everywhere are recognizing their value to address traffic congestion, environmental concerns, health promotion and high gas costs. The Fund will support grass roots advocacy efforts focused on improving cycling infrastructure," said Day.
LBMB’s Moore said: "We are pleased to see SRAM establishing the SRAM Cycling Advocacy Fund, which will give the industry a vehicle to highlight issues of importance to the cycling public."
On the product front, SRAM will release a lot of new bike tech at Eurobike and then Interbike. Like with previous pre-releases – remember the red frog for Red? – SRAM has released a teaser website for a TruVativ’HammerSchmidt’ MTB transmission system.
The Magic Mechanics website contains video trailers, with suggestive quotes: ‘How simple it makes the bike’ and ‘Changes the way we ride’ and ‘Kind-of hard to go back to traditional front shifting’ and ‘I will miss chainring tattoos’ and ‘Takes the thinking out of shifting.’
OEMs and media have ridden with the new MTB gruppo and are said to be "blown away."
