MONTREAL—Montreal-based recreational products firm Dorel Industries Inc. says it is acquiring a majority stake in one of the world’s oldest bicycle makers.
Dorel, which already owns the Cannondale, Schwinn, GT, Mongoose, IronHorse and SUGOI bicycle and cycling equipment brands, is buying a 70 per cent interest in Caloi, a major Brazilian bike manufacturer and the largest bike brand in Latin America.
Financial details were not released, but Dorel announced the purchase price “was a single digit multiple” of Caloi’s earnings before interest, taxes, depreciation and amortization (EBITDA).
Last year, Caloi’s sales were around $117.5-million, according to the Montreal firm, a 22 per cent increase over 2011.
“This new partnership with Caloi positions Dorel as one of the largest bicycle companies in the world, as well as a leader of the Americas,” Dorel president and CEO Martin Schwartz said in a statement.
Caloi, which employs 900 people in Brazil, has a manufacturing plant in Manaus in northern Brazil, the largest bike manufacturing facility outside Southeast Asia.
It has a capacity of more than 700,000 units per year.
According to Dorel, the acquisition of Caloi was a strategic one, as it will make Brazil a manufacturing hub for the companies full range of bicycle brands, including Cannondale, Schwinn, Mongoose and GT.
Brazil will become a production hub for Dorel. Caloi’s factory in Manaus will assemble bikes for the company’s brands, such as Cannondale, Schwinn, Mongoose and GT to serve the Brazilian and export markets.
“We have built this segment into a billion dollar business in just nine years and see tremendous growth ahead,” Schwartz said.
Dorel also owns juvenile products brands Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort.