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Overig advies 07/08/2019 09:45
Parties agree distribution partnership in the US for Raleigh, Haibike and Ghost
HEERENVEEN (THE NETHERLANDS), August 7th 2019 – Accell Group N.V. (“Accell”) reached agreement with private equity firm Regent LP (“Regent”) for the sale of its loss making US business including the worldwide registrations[1] of the brands Diamondback, Redline and IZIP. In addition, Accell and Regent agreed on an exclusive 2-year US distribution partnership for the international Accell brands Raleigh, Haibike and Ghost.

The total consideration amounts to US$ 1 and a maximum contingent consideration (potential earn out) of US$ 15 million. The US business is transferred per August 6th 2019.

Following the sale of the Canadian brand registrations announced on July 12th 2019, today’s announcement completes the strategic review of the North American operations and allows Accell to focus on its European (core) business.

Ton Anbeek, CEO Accell Group: “With this announcement, we have completed the strategic review of our North American business. This allows us to eliminate the profit dilution, while we can continue to distribute our global brands to the US and benefit from the growing demand for e-bikes. We look forward to working with Regent as our US distributor and as global supplier of its sports brand Mavic.

The completion of the strategic review results in a one-off charge which we will absorb in H2 2019. We are glad that we can now put our full focus on accelerating growth of our European core business.”

The overall financial impact of the completed strategic review is summarised below:

1) The estimated H2 impact of the sale of the US business (-/- € 46 million in EBIT and -/- € 10 million in cash) covers the transfer of US trade working capital, main contractual obligations, the majority of personnel and the brand registrations1 for Diamondback, Redline and IZIP for a cash consideration of US$ 1. It also covers direct and indirect transaction costs (eg advisory and liquidation costs) as well as the loss on the intended sale of the US assets of Beeline. The potential benefit of the earn out arrangement, set as a % of EBIT in 2022-2026 with a maximum of US$ 15 million cumulative (contingent consideration), is excluded from the above EBIT and cash estimates.
2) As announced earlier, the sale of the Canadian brand registrations is estimated to contribute € 14 million positive in EBIT and cash.
3) With the divestment of the US business and the earlier sale of the Canadian brand registrations, the North American operations can be considered as substantially liquidated, which results in a reclassification of the translation reserve of € 8 million (loss) to the income statement.

[1] Excluding Canadian brand registrations, which were transferred earlier to the Canadian Tire Company (CTC).

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