MONTREAL, Quebec (BRAIN)—Dorel Industries' Pacific Cycle division has acquired the assets of PTI Sports, a leading U.S. designer, manufacturer and distributor of bicycle parts, helmets and other accessories, for $28.1 million (USD).
“We are excited about this transaction as we will be able to quickly integrate PTI into Pacific Cycle, enabling us to capture and greater leverage our combined synergies, as well as provide additional innovative solutions to our customers. We clearly anticipate upside potential,” said Alice Tillett, president of Pacific Cycle.
The purchase is in line with Dorel’s strategy to aggressively grow its bicycle and juvenile products businesses. PTI will be integrated into the Pacific Cycle division within Dorel’s Recreational/Leisure segment.
There are significant synergies between Pacific Cycle and PTI Sports that will provide a strong foundation going forward:
• In most cases, the same buyers that are responsible for the bicycle category also manage the parts and accessories category. This allows for a more efficient and consolidated sales effort.
• Parts and accessories are a natural extension of Pacific Cycle’s current product categories.
• As a division of Dorel, Pacific Cycle has the resources to allow for greater economies of scale, unique technologies and the ability to bring new products to market faster in a wide variety of product categories, including parts and accessories.
• The acquisition of PTI Sports allows for an ease in executing new marketing initiatives between compatible product lines and developing wide-reaching, exclusive programs for key retailers.
The transaction will be immediately accretive to earnings. PTI recorded sales of $65 million (USD) and an adjusted EBITDA of $5 million (USD) in the 2007 fiscal year.
Established in 1991, PTI Sports has widespread distribution at the key mass and sporting goods retailers throughout North America, including Category Manager positions and 100 percent exclusive agreements with a number of its customers. PTI’s licenses include Schwinn, Mongoose, Disney, Nickelodeon, Mattel (Polly) Master Lock, Thomas the Train and The Discovery Channel.
PTI is the number two North American player in the bicycle helmet market.
Pacific Cycle and PTI Sports began its relationship in 2002 with a license agreement to bring Schwinn and Mongoose branded bicycle parts and accessories to market. Since then, the ties between the two organizations have developed into a partnership that includes marketing initiatives and product development innovations.
