Raleigh management buyout goes public

What the bike trade has known for some time has now gone mainstream: Alan Finden-Crofts wants to secure the ownership of the non-Gazelle parts of the VC-owned Derby Cycle Corporation. An article in yesterday's Sunday Times broke the news outside of the bike trade
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At the NEC trade show there was a Sunday newspaper article about the Tandem group; in another slice of fortutious timing, Raleigh made the mainstream media at the beginning of the International Cycle Convention. The article in The Sunday Times was frank: Raleigh was described as "troubled".

The newspaper reported that Derby's CEO Alan Finden-Crofts is staging a £50m bid to buy the company from its VC owners, Thayer Capital Partners and Perseus Capital.

As expected, Gazelle is to be sold off in a seperate deal, said by the Sunday Times to be worth up to £100m. Gazelle is Derby's profit centre. The highly successful Dutch cycle maker is being bought by the existing Gazelle management team. Bikebiz.co.uk believes the sale will go through within the next ten days.

Alan Finden-Crofts is said to be putting forward about £17m of his own money in the taking Derby private again. The rest is coming from the banks who did due diligence on Raleigh and other Derby companies last month, as reported on www.bikebiz.co.uk.

However, what wasn't mentioned in the Sunday Times was that the deal to take Raleigh private might not go Finden-Crofts' way. Other companies have expressed interest in Raleigh and the rest. These companies have 'sport' backgrounds.

Bikebiz.co.uk learnt last week that if the non-Gazelle parts of Derby were not sold to Finden-Crofts, he would not be sticking around.

Clearly, the best situation for Raleigh would be a Finden-Crofts takeover. He understands the dynamics of the business and recognises the slow-burn nature of bike trade profits.

If he does succeed in the buy-out, and the sale figure is low enough (which in the current macro-economic bike trade climate is likely), Raleigh will no longer be so heavily geared. Any new owner has to invest in the Raleigh factory move and sort out the well-reported inventory problems at Derby Germany.

Finden-Crofts eats and breathes business and is confident he can make a Derby without Gazelle work.

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