Accell Group has reached agreement on the sale of its German Hercules business to German company Zweirad-Einkaufs-Genossenschaft eG (or 'ZEG' for short).
Accell said the move will free up cash for investment in other German brands and 'improves the distinctive market positioning of the Accell Group brand portfolio in Germany'.
Hercules, founded in 1886, was purchased by Accell in 1995. After a repositioning of the brand it returned to growth in recent years, buoyed by Germany's strong e-bike market. However, Accell felt its brands were becoming less distinctive while Hercules wasn't seeing strong enough growth through the ZEG dealer distribution channel, 'its most important sales channel'.
The agreement will see the transfer of the Hercules brand, corporate premises in Neuhof and the entire working capital of the Hercules business to ZEG. The divestment of Hercules will result in a book profit of around €3 million for Accell Group, on a consideration of around €20 million. The divestment is subject to approval from the German competition authorities, which is expected at the end of February.
René Takens, CEO of Accell Group: “The sale of the Hercules brand enables us to increase the focus of our German brand portfolio, consisting of Winora, Ghost and Haibike and to further invest in the distinctiveness of our German brand propositions.
"The sale of one of our traditional brands, which we have had in our brand portfolio for almost 20 years, was not an easy decision, but I believe that now, more than ever, it is crucial that we make strategic choices and ensure we have a healthy organisation fit for the future. We consider Germany as an important market for high-end cycling offering ample growth potential for our group as a whole. It is also a highly competitive market which therefore requires a strong focus on market positioning – or brand and distribution – as well as continued investments in differentiating potential and innovation. The announcement will contribute to that.”
Raleigh UK was purchased by Accell in 2012. For more reading on that topic click here.