European investment firm Groupe Bruxelles Lambert is buying majority stake in Canyon Bicycles GmbH. As a result, TSG Consumer Partners is exiting its stake. Outdoor activities such as bike riding have become very popular during the pandemic, and demand for those products have surged.
“Canyon has long been a lone pioneer in the cycling market for the past 20 years as the only significant direct-to-consumer player while most competitors dismissed DTC in favor of independent wholesale distribution,” says Blythe Jack, managing director, TSG Consumer Partners. “Canyon’s world class product range and its DTC strategy has been a powerful combination as revealed during the global pandemic as demand for premium cycling products delivered via e-commerce has boomed. As a result of Canyon’s unique ability to meet the consumer with the product they want in the channel they prefer, the company has been well positioned to take meaningful market share gains and further drive brand equity. Finally, while Canyon’s value proposition to consumers is certainly compelling, perhaps the bigger unlock is the way in which a DTC model makes the cycling industry a much more attractive one to investors by virtue of owning the invaluable relationship with the consumer and proprietary distribution.”
Groupe Bruxelles says it was attracted to Canyon because there are underlying growth trends in the U.S. bike sector. The pandemic has made consumers more health-conscious than ever, and people are doing more outdoor activities that can be enjoyed while social distancing, such as bike riding.
“Canyon’s growth has been driven by technology leadership and innovative power, increasing brand awareness, capitalizing on the market shift towards e-commerce, increasing penetration of bicycles, especially in the e-bike category, and successful recent entries in the U.S. markets. Canyon will have many growth levers in the coming years, including further growth in Europe and the U.S., as well as in the fast-growing e-bike market,” the firm says in a release.
For more on Mergers & Acquisitions’ coverage on consumer trends, see: The New Consumer: Deals Thrive in 5 Key Sectors, as Covid Changes the Way We Live Now.