Fox Factory Holding Corp. (Nasdaq:FOXF) (“FOX”) today announced, that through certain of its subsidiaries, it has entered into a definitive agreement to acquire substantially all the
assets of the Race Face and Easton Cycling businesses, formerly Race Face Performance Products, Inc. Ltd. (together “Race Face/Easton”). Race Face/Easton designs, manufactures, and distributes high performance mountain and road bike wheels and other high performance cycling components including cranks, bars, stems, and seat posts, globally to OEMs and the aftermarket. “We are very excited about the Race Face/Easton acquisition and look forward to welcoming their team to the FOX family,” stated Larry L. Enterline, FOX’s Chief Executive Officer. “This transaction demonstrates the execution of our strategic initiatives to increase FOX’s product penetration into both existing and adjacent product categories to help drive our bike sales and profitability long term. We look forward to leveraging our global marketing, engineering, distribution, and supply chain resources to collectively develop next generation, high performance bicycle ride dynamics solutions.” “We believe that FOX and Race Face/Easton are a perfect fit as we complement each other with our distinct high performance mountain bike product lines,” said Chris Tutton, President of Race Face/Easton. “The added operations, marketing, and engineering support from FOX will allow us to innovate faster while remaining focused on our core businesses.” FOX will acquire Race Face/Easton in an asset purchase transaction for approximately $30.2 million. The transaction was financed with debt and includes a potential earn out opportunity of up to a maximum of $17.4 million payable over the next two fiscal years contingent upon the achievement of certain performance based financial targets.
On a combined basis, Race Face/Easton generated approximately $23.6 million in unaudited net sales and unaudited Adjusted EBITDA of approximately $4.3 million in its fiscal year ended October 31, 2014. FOX expects Race Face/Easton revenue growth in the high single digit range, and expects to invest in Race Face/Easton to strengthen its infrastructure and maximize the long term potential of the business. The Company plans to provide 2015 guidance along with its fourth quarter and fiscal 2014 earnings announcement. The Company anticipates the transaction to close by the end of 2014
McCoy 5919 posts 0 comments