Pacific Cycle LLC, a portfolio company of Wind Point Partners, last month purchased Brunswick Bicycles, a division of Brunswick Corp. for $60 million. Wind Point retained a majority interest in the company.
General Motors Acceptance Corp. provided a $130 million revolving facility and a $10 million term loan credit for the transaction. The combined entity will be renamed Pacific Cycle. Wind Point Partners Fund III, which funded the Pacific Cycle deal, invested in this transaction.
“Pacific Cycle already had a 10% market share of bikes sold in the U.S. and as a result, a local investment banker in Chicago showed us the company through our prior relationship with the investment banker,” said Rich Kracum, a managing director at Wind Point. Kracum said the fit between Brunswick and Pacific Cycle is “sensational”.
The combined entity will have a 38% market share of bicycles sold in the U.S. and almost $500 million in sales, said Kracum.
Lake Forest, Ill.-based Brunswick Corp. is a manufacturer of consumer brands including Brunswick billiards tables and Brunswick bowling centers, equipment and consumer products. Brunswick Bicycle markets the Mongoose and Roadmaster brands through mass merchandisers. The division had revenues of approximately $300 million last year.
Over the past 10 years, Pacific Cycle has consistently delivered high quality bicycles to mass merchandisers,” said Chris Hornung, chief executive officer and founder of Pacific Cycle. “…together we will be able to offer a full range of quality bicycles to consumers with three established brand names – Mongoose, Pacific and Roadmaster.”
“We believe we will be able to take the three brands and achieve a lot of cross selling, increasing our market share, provide new products such as scooters and combine these two organizations to create a world class team dedicated to the bicycle industry,” said Kracum.
At this time, Wind Point Partners Fund IV is about 80% invested, said Kracum. “We’ll begin raising Wind Point Partners V early this year with a target of $500 million,” he added.
