Dorel’s recreational / leisure segment adds another strong brand with purchase of Iron Horse assets
Montreal, Quebec - 7/15/2009
Dorel Industries Inc. (TSX: DII.A, DII.B;) today announced that it has acquired certain assets of Iron Horse Bicycles, including inventory, various trademarks and trade names, as well as the "Iron Horse" brand, in a transaction valued at US$5.2 million. The assets were acquired in a bankruptcy auction by Iron Horse’s secured lender following that company's decision to suspend operations for financial reasons.
Iron Horse, marketed throughout North America and internationally, is best known for its downhill and extreme trail bikes. Founded in 1987 in New York, Iron Horse Bicycles quickly established themselves as a market force. They gained their reputation with lightning-quick and superb handling bikes that placed them on the international racing stage. Iron Horse has carried a strong roster of professional athletes, including: Dave Cullinan, Kim Sonier, Penny Davidson, Toby Henderson, Leigh Donovan, "Pistol" Pete Loncarevich and Sam Hill. In addition to downhill and extreme trail bikes, Iron Horse products range from mountain bikes, road bikes, and comfort bikes to juvenile bikes and hybrids.
Iron Horse has also received numerous accolades, including the 2003 Mountain Biking Magazine’s “Bike of the Year” award. The brand is recognized as one of the best in the industry. Sales in 2008 were US$25 million globally.
The transaction adds yet another highly recognized name to Dorel’s portfolio. “Adding Iron Horse to our stable of existing world-class bicycle brands, such as Cannondale, Schwinn, GT and Mongoose, brings depth to our mountain bike offerings,” said Robert Baird, President of Dorel’s Recreational/Leisure segment. “With growing interest in mountain biking and racing, the addition makes Dorel better suited to reach new retailers and, in turn, consumers.”
“This latest purchase is in line with the strategic road map we have developed to build our bicycle business into the leading global bicycle company,” stated Dorel President and CEO, Martin Schwartz. “While their 2008 sales were US$25 million, we are confident we can significantly grow this number. Iron Horse is another excellent brand that we will be able to leverage through our vast resources. The purchase price was most favourable and we look forward to an excellent return on this investment.”
Dorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile products and bicycle company. Established in 1962, Dorel creates style and excitement in equal measure to safety, quality and value. The Company’s lifestyle leadership position is pronounced in both its Juvenile and Bicycle categories with an array of trend-setting products. Dorel’s powerfully branded products include Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort in Juvenile, as well as Cannondale, Schwinn, GT, Mongoose and SUGOI in Recreational/Leisure. Dorel’s Home Furnishings segment markets a wide assortment of furniture products, both domestically produced and imported. Dorel is a US$2.2 billion company with 4700 employees, facilities in eighteen countries, and sales worldwide.
Caution Concerning Forward-Looking Statements
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of Dorel Industries Inc. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. The business of the Company and these forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ from expected results. Important factors which could cause such differences may include, without excluding other considerations, increases in raw material costs, particularly for key input factors such as particle board and resins; increases in ocean freight container costs; failure of new products to meet demand expectations; changes to the Company’s effective income tax rate as a result of changes in the anticipated geographic mix of revenues; the impact of price pressures exerted by competitors, and settlements for product liability cases which exceed the Company’s insurance coverage limits. A description of the above mentioned items and certain additional risk factors are discussed in the Company’s Annual MD&A and Annual Information Form, filed with the securities regulatory authorities. The risk factors outlined in the previously mentioned documents are specifically incorporated herein by reference. The Company’s business, financial condition, or operating results could be materially adversely affected if any of these risks and uncertainties were to materialize. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.